Preamble

The House met at half past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

GREATER MANCHESTER (LIGHT RAPID TRANSIT SYSTEM) BILL [Lords]

Order for Third Reading read.

Amendments agreed to.

Read the Third time, and passed, with amendments.

GREATER MANCHESTER (LIGHT RAPID TRANSIT SYSTEM) (No. 2) BILL [Lords]

Read the Third time, and passed, with amendments.

Oral Answers to Questions — SCOTLAND

Regional Aid

Mr. O'Neill: To ask the Secretary of State for Scotland when he will next be meeting the Scottish Trades Union Congress to discuss regional aid.

The Secretary of State for Scotland (Mr. Malcolm Rifkind): I have not received any request from the Scottish Trades Union Congress for a meeting to discuss regional assistance.

Mr. O'Neill: When the Secretary of State next meets the STUC to discuss regional aid, what assurances will he be able to give, as it is likely that the amount of aid for 1986, £240 million, will have fallen by about a third by the end of the decade? How many of the 3,000 applicants who last year were successful in securing regional aid will be able to obtain it under the new regime that he outlined last week?

Mr. Rifkind: It should be fairly easy to reassure the STUC. The switch from automatic to selective assistance is in line with the recommendation of the Scottish Council (Development and Industry). In formulating its views on these matters the council consulted all its members, including its trade union members.

Mr. Buchanan-Smith: When my right hon. and learned Friend meets the STUC, will he point out that for regions, such as Grampian, there will be less advantage in these changes?

Mr. Rifkind: My hon. Friend is correct. We are considering not only the selective forms of assistance, as described in the regional selective assistance proposals, but

the new business advisory and consultancy services. They will have an enormous impact on the growth of small businesses in Scotland. I am sure that all hon. Members will support that objective.

Mr. Kirkwood: When the Secretary of State meets the STUC to discuss regional aid, will he consider the important question of the impact of EEC aid? He will know that the EEC attaches great importance to complementing the national regional strategies that are being employed by the Government. However, is he aware that it does not recognise that we have a proper rural regional development strategy? Will he pay attention to that important missing element in the regional aid package?

Mr. Rifkind: It is not missing. The Government consider the development of rural areas of major importance. The Scottish Development Agency estimates that 25 per cent. of its expenditure goes to rural areas to develop the economic infrastructure and to help businesses in those areas. Increasingly, that is being recognised.

Mr. Maxton: As the latest report of the Manpower Services Commission shows that the Scottish economy is doing worse than the economy of the rest of the United Kingdom, will the Secretary of State admit that there is a need for a massive increase in regional aid, rather than a cut, which is what he is proposing over the next few years? How can selective assistance possibly replace mandatory regional development grants? If he can, will he give a guarantee that all the money available for selective assistance will be used in Scotland for investment in Scottish industry?

Mr. Rifkind: The hon. Gentleman might like to read more carefully the survey of the Fraser of Allander Institute, published last week, which reported great optimism for the future of the economy. The Scottish CBI survey, which was published yesterday, showed that, for the first time for some considerable period, the prospects for businesses in Scotland are more attractive and beneficial to the prospects of employment and growth than elsewhere in the United Kingdom. I am sure that the hon. Gentleman will take as much pleasure from that as I do.

BBC Scotland

Mr. Galbraith: To ask the Secretary of State for Scotland when he last met the controller of BBC Scotland; and what matters were discussed.

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): My right hon. and learned Friend last met the controller on 4 December, along with other senior Scottish television and radio executives, for a discussion on a broad range of Scottish affairs of interest to them.

Mr. Galbraith: Did they discuss the episode "Cabinet" of the series "Secret Society"? I understand from my hon. Friend the Member for Edinburgh, South (Mr. Griffiths), who has seen this programme, that it is a damning indictment of the Cabinet and Press Secretary Ingham. Is not the Minister, having failed to censor the Scottish media by using the courts, now resorting to his other method —intimidation?

Lord James Douglas-Hamilton: I can answer the hon. Gentleman's question in relation to this film by saying that


I understand that, after consulting the Government, the BBC decided last year not to show the film; but the BBC is aware that the Government deplore the dissemination of security information of this nature.

Sir Hector Monro: Will my hon. Friend impress upon the controller the importance of improving both long-wave and VHF reception in Scotland? Secondly, will he take up the issue in south-west Scotland of the occasions when the BBC splits programmes and south-west Scotland receives programmes from the north of England, which often means missing good Scottish international football?

Lord James Douglas-Hamilton: I will draw to the attention of the controller my hon. Friend's comments. The proposals for the creation of new commercial stations will increase the competition faced by the BBC, and it will have to ensure that the quality of its material is sufficient to retain its business. I am sure that it will welcome that challenge.

Mr. Darling: Further to the answer given to my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith), I have seen the programme "Cabinet", which is part of the "Secret Society" series. Can the Minister assure us that he will place no impediment in the way of the BBC transmitting the film, which was cleared by the former director general, and has been cleared legally, and which raises no questions of national security?

Lord James Douglas-Hamilton: I understand what the hon. Gentleman is asking for, but I can only repeat what I have already said. The Government would deplore the dissemination of classified information of this nature. I do not wish to depart from that.

Mr. Dewar: Does the Minister, with hindsight, regret the rather high-handed way in which the warrant against the BBC was executed by the police, and does he not have doubts about the endless paperchase through the courts as the Government attempt to stop free discussion in the press about matters that are already in the public domain and which can be discussed in almost every other country?

Lord Douglas-Hamilton: I shall answer the second part of the hon. Gentleman's question first. In relation to the distinction between an injunction and an interdict, I would say this. The Lord Advocate has not suggested — [Interruption.] The hon. Member for Glasgow, Garscadden (Mr. Dewar) has asked about the courts, so I am entitled to give him a full reply. I will come back to the first part of his question as well.
The Lord Advocate has not suggested that an injunction granted by the High Court in England would apply in Scotland. Nor does the statement, as reported by The Scotsman, imply that to be the case. The Scottish legal system is distinct and separate from systems applying elsewhere in the United Kingdom. The Government consider that a responsible media will ordinarily take account of decisions of a court in one jurisdiction of the United Kingdom which may have an effect on the conduct of the press in that jurisdiction, and that a responsible media will deduce that, in the absence of special circumstances, a similar restriction might reasonably be expected to apply in other jurisdictions. The Government take the view that the media should not be subject to restrictions in Scotland to which they would not be subject in England, and vice versa. Therefore, the Lord Advocate took the view that if the injunction granted by the High

Court was in terms less restrictive than the terms of an interim interdict, it was appropriate to indicate that he would not seek to enforce the interdict. In one sense—[Interruption.] I will answer the hon. Gentleman's first question later. The Lord Advocate is satisfied that the proper—[Interruption.]

Mr. Speaker: Order. The Under-Secretary must be given a chance to answer. Or has he answered?

Lord James Douglas-Hamilton: The Lord Advocate is satisfied that the proper procedures had been followed in obtaining the search warrant.

Scottish Film Council

Mr. Tom Clarke: To ask the Secretary of State for Scotland if he will make a statement on the future of the Scottish Film Council, and the proposal to amalgamate that body with the Scottish Arts Council.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth): I shall make an announcement shortly on the Government's response to the report of a policy review of the Scottish Film Council which was carried out last year.

Mr. Clarke: Will the Minister provide the Library with a copy of the review? Does he accept than no one who knows anything about film in Scotland — from film makers to consumers, to educationists and to those involved in film archives — supports the proposal for amalgamation? Does he further accept that although the proposals may be convenient to bureaucrats at St. Andrew's House, and even at the Treasury, it offers no help whatever to an organisation that has done much to promote film in Scotland and beyond since 1934?

Mr. Forsyth: The proposal for a merger of the Scottish Film Council with the Scottish Arts Council is only one of a number of options put forward. The hon. Gentleman does the review an injustice by concentrating on that alone, as the review has been warmly welcomed by the council.

Mr. Clarke: The report is not in the Library. No one has read it.

Mr. Forsyth: If the hon. Gentleman will allow me to answer the question, I shall try to answer the points that he has put.
The review has been warmly welcomed by the council, and I can assure the hon. Gentleman that the arguments that he has advanced and the various options are under consideration at the moment, and we expect to make an announcement shortly.

Regional Aid

Mr. Fallon: To ask the Secretary of State for Scotland what information he has as to how much is spent on industrial support per capita in Scotland compared with England.

The Minister of State, Scottish Office (Mr. Ian Lang): In 1986–87, identifiable public expenditure on the industry, energy, trade and employment programme in Scotland was £178·2 per head compared with £81·4 per head in England.
The difference partly reflects the fact that the share of the Scottish population in assisted areas is more than twice that in England.

Mr. Fallon: Does not the fact that Scottish business now needs twice as much help as English business illustrate the dangers of overdependency of the "suppie" culture on the English taxpayer? Will my hon. Friend reassure the House that we are getting better value for money for this industrial support?

Mr. Lang: My hon. Friend is absolutely right to stress the importance of value for money. Value for money is an important criterion in judging the value of regional assistance. My hon. Friend might like to know that in 1986–87 regional assistance in Scotland was £40 per head, whereas in the north of England it was £39 per head. In addition, Manpower Services Commission schemes provided £179 per head in the north compared with £143 in Scotland.

Dr. Bray: Is the Minister aware that under the current reorganisation of the Department of Trade and Industry — "DTI — the department for Enterprise" — the management of the consulting and advisory services for the engineering industry is being transferred from the National Enginering Laboratory in East Kilbride to the Production Engineering Research Association in Melton Mowbray? Is the Minister aware that that is part of the continuing pattern of draining industrial resources and activities from Scotland to the south?

Mr. Lang: The hon. Gentleman is wrong in his general conclusion. The whole purpose of regional assistance is to enable the delivery mechanism to be located in Scotland. The Scottish Development Agency will be providing a major part of that delivery mechanism.

Mr. Neil Hamilton: Is my hon. Friend aware that many people in this country think that, overall, policies of industrial support have destroyed rather than saved jobs? At the risk of being accused of being gratuitiously offensive by The Scotsman, as I was, will my hon. Friend comment on the Labour party's proposals for regional aid? Those proposals would translate the regional aid budget from my hon. Friend's Department into the Department responsible for the arts, because all that the Labour party seeks to do is to convert Scotland into a museum of industrial archaelogy.

Mr. Lang: My hon. Friend makes an interesting point. In the context of regional selective assistance, the House might like to know that a recent document produced by the TUC said that to make regional and local planning bodies effective the amount of selective assistance would be progressively increased until all assistance became selective.

Mr. Salmond: When will the Minister educate his English Back-Bench colleagues in the realities of public finance in the United Kingdom? For example, will he tell them that industrial support through the medium of defence procurement, which is concentrated in certain areas of the country, results in a £2,500 million subsidy to the English economy–10 times the entire regional aid budget for Scotland?

Mr. Lang: I am happy to welcome that part of the defence budget that goes to Scotland. More particularly, I am glad to welcome the fact that Scotland shares in the general defence of the United Kingdom.

Labour Statistics

Mr. Oppenheim: To ask the Secretary of State for Scotland if he will publish the number of persons in employment and the number unemployed in Scotland in the years 1983 to the present.

Mr. Rifkind: I have put the figures in the Library. The provisional estimate of the civilian labour force in June 1987 is marginally higher than in the four previous years, and seasonally adjusted unemployment is now at its lowest level since June 1983.

Mr. Oppenheim: Does my right hon. and learned Friend agree that the figures show that the Scots are slowly coming to grips with the structural weaknesses in their economy? Does he also agree that the figures confirm the Scots' reputation as a doughty, dour, hardy, independent-minded people, and that, unfortunately, that fine reputation is too often endangered by the constant whingeing by Opposition Members for more subsidies from the south?

Mr. Rifkind: My hon. Friend is certainly correct. Opposition Members appear to think that the only solution to any economic or industrial problem is the expenditure of resources. The transformation that is taking place in the Scottish economy has more to do with the spirit of enterprise in Scotland than with the level of available public funds. Indeed, Opposition Members are gradually coming to the same conclusion.

Mrs. Fyfe: Is the Secretary of State aware that in October 1987, 19·6 per cent. of the economically active population of Glasgow were unemployed and that in April 1984 the figure was 20·9 per cent.? Is that what he calls the transformation of the Glasgow economy? Is he aware that of that percentage of unemployed people more than half are long-term unemployed? Is that what he calls a triumph for Tory economic policies? Is he further aware that for every job vacancy outwith the community programme in Glasgow, there are 22 applicants, compared with 10 in Great Britain?

Mr. Rifkind: The hon. Lady, as a Glasgow Member, appears to be the only person in Glasgow who is unaware that, during this Government's term of office, Glasgow has been transformed into one of the most impressive examples of urban regeneration. In every forum except this one the hon. Lady constantly pronounces to the general public how impressive Glasgow is now compared with what it was like in 1979.

Mr. Worthington: Is the Secretary of State aware that in Clydebank and Milngavie in September 1979 there were 3,500 unemployed people, and in September 1987 there were 7,500? The figures do not take into account the 590 people in community programme places or the 19 separate downward adjustments of the unemployment figures. Is that the transformation of which the Secretary of State is boasting?

Mr. Rifkind: The transformation of which I am boasting includes projects such as that of Health Care International, which, without any support from him, may bring 4,000 to 5,000 jobs to the hon. Gentleman's constituency.

Mr. Fairbairn: I join my right hon. and learned Friend in emphasising the magnificent transformation of


Glasgow, which is entirely due to the Government's policies in the past few years. Now that we have abandoned the blanket concept of regional grants, will he consider the regeneration of other towns, villages and cities in Scotland, so that we can attract industry instead of switching it from one place to another?

Mr. Rifkind: My hon. and learned Friend will be aware that the Government's priority for the future is to concentrate on many peripheral housing estates in Scotland in which there are substantial social, unemployment, economic and housing problems. It is by a major infusion of private sector investment, with public support, that we shall see the transformation of such areas into places of which we can all be proud.

Newbattle Abbey College

Mr. Steel: To ask the Secretary of State for Scotland if he will make a statement on the proposed closure of Newbattle Abbey college.

Mr. Rifkind: Circumstances have changed in the last 50 years. The college prepares only about 40 students each year for entry to higher education, at a total annual cost of more than £500,000. But every year about 6,000 mature students go into higher education in Scotland who have made no use of the college. It is difficult in those circumstances to maintain that it is meeting a significant national need and I have decided to withdraw grant with effect from the end of the next academic year. In my view, the grant paid to Newbattle can be more effectively spent in other ways to promote increased access to higher education.

Mr. Steel: Does the Secretary of State accept that Newbattle Abbey college is a national institution, which is greatly valued throughout the country because it provides a form of access to higher education, especially for late entrants and those who have already missed out in developing their education in earlier years, and that no comparable facility is available anywhere else in higher education or through the Open University? Does he also accept that there has been criticism of his Department for the total lack of consultation when taking that decision?

Mr. Rifkind: On the right hon. Gentleman's latter point, the withdrawal of grant will take place in 18 months' time. Therefore, there is plenty of opportunity to hear any representations that people may wish to make.
On the right hon. Gentleman's earlier question, he must take into account the fact that of the 98 students at the college in 1986–87, 42 were from Edinburgh and Lothian and were unlikely to require residential accommodation; 29 came from England and Wales; none came from the north of Scotland; and very few from other parts of Scotland. In those circumstances, it is difficult to put forward a credible argument that there is any significant need for residential accommodation of the kind that Newbattle provides.

Mr. Eadie: Does the right hon. and learned Gentleman not understand that the measure of consultation has been strange? My understanding is that there was no consultation prior to his decision to withdraw funding. Is it a case of shooting from the hip and asking questions afterwards? What a strange concept of consultation. Does he not realise that there is great resentment because the equivalent in Scotland of Ruskin college, Oxford, is to be

withdrawn? Is that not a shoddy way to deal with education, and do we not now seem to have a bunch of philistines in new St. Andrew's House dealing with education?

Mr. Rifkind: I appreciate the fact that the trade unions have identified themselves with the campaign to save Newbattle Abbey college. However, that might be more impressive if the trade unions in question had used Newbattle Abbey college themselves, or if they had made any significant contribution to its work. Only one trade union in Scotland has made any donation to college funds during 1986–87, and not one trade union made use of it during that year to provide short residential courses for its members.

Mr. Buchanan-Smith: First, will my right hon. and learned Friend acknowledge that there was no consultation before the decision was taken? Secondly, will he tell the House what circumstances have changed since the HMI report of 1984, which recommended the continuation of the college?

Mr. Rifkind: I must advise my right hon. Friend that with 6,000 entrants over the age of 21 going on to higher and further education in Scotland, I do not believe that he can put forward any credible argument that it is justified to use £500,000 of public funds for the admission of 40 students to that college, the vast majority of whom did not require residential accommodation, given their place of residence.
I emphasise to my right hon. Friend that the resources saved from the withdrawal of support — whether the college will close is a matter for the governors—will be used for higher and further education in Scotland, which will assist the higher and further education requirements of far more students than currently seem interested in using the facilities at Newbattle Abbey college.

Mrs. Margaret Ewing: Does the Secretary of State not feel some sense of shame that, through his penny-pinching attitude, he is destroying what was bequeathed to the nation of Scotland and provided an additional asset to our education system? Surely the whole point of having a facility such as Newbattle Abbey college is to enable people to re-enter education for a variety of reasons at a later stage but not within the formal system? Therefore, does he not agree that, in the concept of life-long education, we should maintain that facility?

Mr. Rifkind: Of course that is a desirable objective, but I advise the hon. Lady that there has been precious little interest in using that facility. No one from the hon. Lady's constituency or from a line drawn north of Fort William to Aberdeen has even entered the college during the past year. If we are considering the need for a residential college, we must have the gravest doubts whether there is any need for expenditure of that kind when the trade unions have made little use of the facility and, bar one union, have made no contribution to its running costs and, indeed, when most of the students come from the Edinburgh and Lothian area or from England and Wales. The hon. Lady should bear that in mind.

Mr. Home Robertson: Circumstances have certainly changed in recent years. I understand that the right hon. and learned Gentleman used to be listed as a friend of Newbattle college. Is he aware that we deplore the fact that the Government are discarding this unique college? Can


he tell us why Scotland should be the only nation in Britain without a specialist college to give adults a second chance of gaining the benefits of further education?

Mr. Rifkind: The hon. Gentleman might bear in mind the remarks of some of his Labour colleagues. For example, during the discussion of these matters with Strathclyde regional council yesterday a Labour councillor, Councillor Gilmore, warned his colleagues against indulging in media protests and went on to say that, in his view, the Government had a case for the better use of a £500,000 grant from the SED.

Cervical Smear Tests

Dr. Moonie: To ask the Secretary of State for Scotland if he will make a statement on the results of the recent campaign to encourage women in Scotland to have a cervical smear test.

Mr. Michael Forsyth: There has been no recent national publicity campaign in Scotland on cervical cancer screening. I announced on 10 December 1987 that a comprehensive cervical cancer screening service is to be made available to all women in Scotland aged between 20 and 60 years of age.

Dr. Moonie: In view of the increasing number of women taking advantage of screening facilities, what steps has the Minister taken to ensure that back-up facilities for treatment are readily available to prevent women from having to wait inordinate lengths of time?

Mr. Forsyth: The Government are providing about £6 million to ensure that the software and computer facilities are in place by the end of the year, so that women come in on a call and recall basis. The computer call and recall service will ensure that they are brought in. I am not aware of any problems with any health boards connected with the carrying out of screening.

Mr. Ernie Ross: The Minister will be aware that Tayside has a vey good recall system for cervical cancer. When will he be able to say where the unit for mammography will be established in Scotland?

Mr. Forsyth: We recently announced that we expected to establish 10 units throughout Scotland, and we expect all of them to be in place by 1991.

Mr. Andrew Welsh: We are now trying to increase the number of such tests. Is the Minister aware of the corollary —that more tests will mean a much heavier workload on MLSOs and associated technical staff in hospitals? Is he also aware of the anger felt by MLSOs and other staff about the failure to recognise their proper status or salary levels, and will he give his backing to help them to carry out their important work?

Mr. Forsyth: The precise pattern of workloads and the way in which tests and screenings are carried out are matters for health boards. I am sure that they will take into account all the options open to them.

Health Service Expenditure

Mr. Forth: To ask the Secretary of State for Scotland if he will give the expenditure per head in real terms on health services in Scotland in 1979 and 1987; and if he will make a statement.

Mr. Michael Forsyth: Gross expenditure on the National Health Service in Scotland in 1979–80, at 1987–88 prices, was £354 per head of population. The corresponding figure for 1987–88 is expected to be £454.
These figures for Scotland are some 25 per cent. higher than the equivalent figures for England, and Scotland has 39 per cent. more health staff and 59 per cent. more hospital beds than England on a population basis.

Mr. Forth: I thank my right hon. Friend for those impressive but not surprising figures. Can he tell the House whether he believes that there has been a commensurate dramatic increase in the quality of patient care, particularly in the light of the article on the front page of today's Glasgow Herald? Can he explain that?

Mr. Forsyth: I share my hon. Friend's concern about that article, and I have had inquiries made. The injuries suffered by the reporter concerned can be treated by a padded crepe support bandage or short plaster. [HON. MEMBERS: "Dr. Forsyth?"] May I ask hon. Members to listen? Contrary to what is printed in the Herald the reporter expressed a wish not to have a plaster, so that he could drive to Stirling. I am reliably informed that this was recorded and witnessed.
Had a plaster been essential, the medical staff in the accident and emergency unit could have applied one. This is a scurrilous and inaccurate piece of reporting, and I deplore such an unwarraned attack on the excellent facilities and staff at the Western infirmary in Glasgow.

Mr. Douglas: I believe that we should get back to the main question. I want the Minister to deal with the relevant aspects of expenditure, that is the proportion of GDP spent on health care in England and Wales and in Scotland. Is it not a fact that for the United Kingdom as a whole expenditure on health care is good value for money, and that attempts to undermine that by stupid proposals such as contracting out are to be deplored by hon. Members on both sides of the House?

Mr. Forsyth: I am very grateful to the hon. Gentleman for asking about GDP. He will know that health expenditure in England as a proportion of GDP is 6·2 per cent. In Scotland it is 8·2 per cent. That means that we have significantly more resources. The point of competitive tendering is to ensure that we make the maximum possible provision for patient care.

Mr. Bill Walker: These interesting figures provided by my hon. Friend show clearly that the Government are concerned with health care and that health care really matters. Will he confirm that the Government will look very carefully at these matters to ensure that we receive value for money throughout the Health Service in Scotland, and in particular will he consider the great value for money provided by community hospitals?

Mr. Forsyth: I am grateful to my hon. Friend. The Government are determined to ensure value for money in the Health Service and at the same time to provide additional resources. Next year's additional allocation of expenditure for the Health Service in Scotland, at some £120 million, will be the biggest ever in cash terms in the history of the Health Service in Scotland. I wish that Opposition Members would acknowledge that.

Mr. Wilson: In view of the Minister's very recent, very personal and very profitable connections with the private health sector, is it not time that he was seen to get his sticky


fingers off the Scottish Health Service? Will he accept that it is doubly offensive to loyal servants and low-paid workers in the National Health Service to see someone trying to do them out of their jobs when they know that that individual has such strong, personal, vested interests in the destruction of public sector employment and its replacement with cheapskate contract labour?

Mr. Forsyth: I have no vested interest. I deplore the hon. Gentleman's offensive attack on those workers because, by implication, he is arguing that competitive tendering will put them out of work. That means that he thinks they are providing inefficient services. They have nothing to fear from competitive tendering if their services are providing value for money. Any savings that are achieved will result in improved patient care for the hon. Gentleman's constituents, whom he should seek to represent.

Sir Hector Monro: Does my hon. Friend agree that since 1979 the Government have provided 5,770 new beds and that in the 34 new projects under construction there will be another 4,484? Is that not a splendid achievement, which shows that the Government have every intention of maintaining a close interest in the Health Service?

Mr. Forsyth: I am grateful to my hon. Friend. He has drawn attention to the biggest capital investment programme in the history of the Health Service in Scotland undertaken by this Government because of the success of our economic policies and the priority that we have placed on the Health Service. When Opposition Members formed the previous Labour Government they presided over the biggest ever cut in the capital programme in the Health Service in Scotland.

Mr. Dewar: Does the Minister not share my sharp concern about the crisis in the Health Service and the frustration that is growing daily among those committed to the delivery of a comprehensive and adequate service to those in need? Will he accept that if we are to avoid industrial action—which no hon. Member wants to see —it is important that he makes his contribution to that process? Will he look again at the circular on privatisation, because it is resented by the boards, which, in many cases, are seeing their professional judgment on how they manage their areas being overturned? It is also resented by the staff whose jobs are at risk and by the public who know that contracting out is depressingly irrelevant to the real problems facing the Health Service.

Mr. Forsyth: I noted that the hon. Gentleman has aligned himself with those calling for industrial action in the Health Service, and his photograph appeared in the Glasgow Herald. It is in the interests of the Health Service to maximise the resources available for patient care. [Interruption.] If the hon. Gentleman is saying that he does not align himself with those calling for industrial action in the Health Service, I welcome that.
Since 1983 the boards have been asked to carry out competitive tendering in Scotland. They have not done so. Health authorities in England have, and as a result the Health Service in England has had £100 million a year extra to spend on patient care. Is the hon. Gentleman really arguing that patients in Scotland should be denied those extra resources simply to keep his friends in the trade unions happy?

Councillors (Salary)

Mr. Ron Brown: To ask the Secretary of State for Scotland what representations he has received from COSLA proposing salaries for councillors; and if he will make a statement.

Lord James Douglas-Hamilton: My right hon. and learned Friend has received no representations from the convention regarding salaries for councillors. The convention has, however, indicated that it is in favour of the Widdicombe committee's recommendation that councillors should be paid a flat-rate allowance.

Mr. Brown: Is it not the case that the people who represent local government in Scotland, the councillors, deserve a proper rate for the job, a salary, particularly when they have to defend basic services and fight against the poll tax? We in the Labour movement expect them to organise a movement which will, if need be, break the law to challenge the Government, who are imposing a regime that is totally unacceptable to Scottish people.

Lord James Douglas-Hamilton: I am aware of the contributions made by councillors. The hon. Gentleman and I were councillors in Edinburgh together. I should mention that proposals for a further increase will be considered in the near future, and the results will be announced in the spring. The maximum daily rate of attendance allowance is now 17·;55. That may be seen as inadequate by those who insist on regarding it as a daily rate of pay, but it was never intended to be that.

Mr. Robertson: Was there not something impertinent and improper about Ministers attacking Scottish councillors for coming to the capital city of the United Kingdom last week to tell the House—which is, after all, considering poll tax legislation in England and Wales — about universal Scottish feeling about that unfair, inefficient and deeply unpopular imposition on the people of Scotland?

Lord James Douglas-Hamilton: It is a perfectly legitimate comment if councillors are travelling at the ratepayers' expense. Perhaps the hon. Gentleman is referring to assertions arising out of that.

Mr. John Marshall: As a former Aberdeen town councillor, may I suggest that service in local government should appeal to people's sense of service rather than to their sense of greed?

lord James Douglas-Hamilton: I wholeheartedly agree with my hon. Friend. A sense of public service is extremely important, and I have no doubt that many people enter local government as a vocation and not for any other reason.

Regional Aid

Mr. Malcolm Bruce: To ask the Secretary of State for Scotland if he will give the latest estimate of the number of jobs created by regional development grants in Scotland since 1984.

Mr. Lang: Revised regional development grant has been associated with the creation of over 25,000 jobs in Scotland since 1984. The old regional development grant scheme was not linked directly to job creation.

Mr. Bruce: While the Government's proposed changes will be welcome in areas such as mine, where we do not


have access to regional development grant, will the Minister nevertheless acknowledge that the lack of automatic availability of grant could be at considerable cost to Scotland in terms of investment in the coming year? If there is to be a programme of selective assistance, will he ensure that the criteria are fully understood and appreciated so that investment is not driven away because people have to wait too long before they know whether they will get assistance?

Mr. Lang: I am grateful for the fact that the hon. Gentleman welcomes some of the provisions in the recent enterprise initative. He will have noted that Aberdeen is one of the areas where a higher rate of consultancy assistance grant will be payable. The take-up of applications available under the selective assistance scheme will depend entirely on the number of applications forthcoming. We intend to publicise the scheme widely to ensure that the funds available are taken up.

Mr. McLeish: Will the Minister reflect on the fact that he has reduced expenditure on regional development grant from £170 million in 1986–87 to £66 million in the current year? That is against a background of three points: first, manufacturing employment in Scotland has fallen below 400,000 for the first time this century; secondly, the figures in the MSC "Labour Market Quarterly" report of November 1987[Interruption.]

Mr. Speaker: Order. Do not read them, please.

Mr. McLeish: The figures show that in terms of the 10 economic units in the United Kingdom, Scotland has had the smallest increase in the number of employees between June 1986 and 1987, and the biggest reduction in manufacturing jobs in any economic region in the United Kingdom. Can the Minister take pride in such a background when cutting regional development grants?

Mr. Lang: I do not recognise the background that the hon. Gentleman describes. In the first place, the proportion of regional aid coming to Scotland has risen from 20 per cent. in 1979 to over 30 per cent. now, and, in the second place, the background is one of falling unemployment and rising investment, manufacturing output and manufacturing productivity.

Mr. Bill Walker: Does my hon. Friend agree that if regional aid as practised by successive Governments since 1945 had been successful, as is claimed by the Opposition Benches, the areas of high relative unemployment would not be the same today as they were immediately after the war? The sad fact is that the areas of high relative unemployment are much the same, so the system obviously does not work. Therefore, the new system that is being introduced must at least be an improvement on what has gone on in the past.

Mr. Lang: My hon. Friend is absolutely right. It is not without significance that the Labour Government cut the industrial programme in the Scottish block allocation by 13 per cent. during their last three years.

Mr. McAllion: Does the Minister realise that the automatic availability of regional development grant played an important part in Ford's decision to locate its latest plant in Dundee, thereby bringing 400 desperately needed jobs to an area of high unemployment? Does he share the people of Scotland's view that, in the fiercely

competitive business of attracting major inward investment projects into areas of high unemployment in Scotland, it is essential to get the total package of incentives right, so that we can out-compete areas such as Spain? How are we to do that if that total package is gravely weakened by the removal of automatic regional development grant from development areas such as Dundee?

Mr. Lang: The successful attraction of Ford to Dundee had nothing to do with the availability of automatic regional development grant. The company would have been equally entitled to regional selective assistance and the package available to it could have been exactly the same. The fact is that inward investment, which is such an important and successsful part of our economic industrial policy in Scotland, will not be jeopardised by the changes that we are making.

Mr. McLoughlin: Will my hon. Friend, as a Minister in the United Kingdom Government, give some thought to how many jobs have been created by regional aid and how many jobs have been switched from various parts of the United Kingdom? Is he aware that there is deep resentment in Belper, in my constituency, where jobs were lost when English Sewing, part of the Tootal group, was switched to Scotland? Jobs are important in every part of the United Kingdom, not just in Scotland.

Mr. Lang: My hon. Friend is right to point to one of the disadvantages of regional assistance, when it simply moves jobs around the country. A recent study, which has been published, shows that about 600,000 jobs have been created, but 150,000 of them have subsequently been lost. That is a strong argument against automaticity and in favour of a more selective approach.

Health Service Expenditure

Mrs. Margaret Ewing: To ask the Secretary of State for Scotland if he will meet representatives of Grampian health board to discuss national strategies for health expenditure.

Mr. Michael Forsyth: I hold regular meetings with the chairmen of all Scottish health boards, at which strategic issues are discussed.

Mrs. Ewing: At the Minister's next meeting with the representatives of Grampian health board on strategic issues, will he consider with them the issues surrounding the future of maternity services in Grampian region? Is he aware that the professional advice offered to Grampian health board showed that the SHARPEN recommendations of nil growth in maternity facilities would be unacceptable in that area because staffing complements and bed levels are already well below the national level? Against that background, will he ensure that he reads every response to proposals to close the peripheral units in my constituency, and those of other hon. Members, where there are sound medical, economic and social reasons for their retention?

Mr. Forsyth: As the hon. Lady knows, Grampian health board recently conducted a review of maternity beds in the area which revealed particular pressures on facilities at the Aberdeen maternity hospital and widespread under-use of facilities elsewhere. I cart assure the hon. Lady that the board is currently consulting. Any


decision that might involve any closures would require the consent of my right hon. Friend the Secretary of State, and we shall obviously consider carefully the representations that we have received from her and from her constituents before any conclusions are reached.

Mr. Fairbairn: Does my hon. Friend agree that the figures that he gave in reply to an earlier question, showing the enormous disparity in money and in the proportion of the GNP being spent in Scotland, and in Grampian as part of it, merely demonstrates the fallacy of the argument that the Opposition are trying to foist upon the public, and that throwing more money at a place is not the answer to improving medical services?

Mr. Forsyth: I am grateful to my hon. and learned Friend, who makes a very important point with regard to Grampian, because not only has Grampian a share of the additional resources available for health care in Scotland, but its share of the Scottish SHARE has been increasing. Its share of available resources has gone up from 8·5 to 9·2 per cent., and the board is approximately £10 million better off today than it would have been if our SHARE formula had not existed.

Devolution

Mr. Canavan: To ask the Secretary of State for Scotland what evidence he has of the level of demand for a devolved Scottish Parliament.

Mr. Rifkind: I have considerable evidence of the Opposition's interest in a Scottish Parliament, but little evidence of the electorate's interest.

Mr. Canavan: When will the Secretary of State stop simply parroting his mistress's voice, repeating her absurd claims that there is little, if any, demand for devolution in Scotland? If he refuses to acknowledge that 76 per cent. of the Scottish voters voted at the last general election for parties with a commitment to set up some form of Scottish Assembly or Scottish Parliament, will he at least have the courage to put his view to the test by the people of Scotland, by having another referendum, so that they can decide, instead of being dictated to by this autocratic Government?

Mr. Rifkind: I note that the hon. Gentleman has been virtually disowned by his parliamentary colleagues for his general approach to these matters. He really must take account of the fact that the referendum that took place resulted in less than one third of the people of Scotland voting for the proposals with which he is associated. There is no reason to believe that the results of another referendum would be any different.

Mr. Fallon: Are not the Scots already complaining about the level of community charge to be levied in Scotland? What would be the annual cost of the Assembly charge levied on every Scot to finance this pipe dream?

Mr. Rifkind: My hon. Friend is correct to say that it is extraordinary that the Labour party should be committed to imposing on Scotland a tax which at no time is to be imposed on any other part of the United Kingdom.

Mr. Hood: I rise to change the tempo of Question Time, to acknowledge that the greatest service the Prime Minister has done for Scotland so far is in appointing Sir

Ian MacGregor to the new Tory party think-tank in Scotland—[HON. MEMBERS: "What has this to do with the question?"]—

Mr. Speaker: Order. The subject is the Scottish Parliament.

Mr. Hood: May I say — [HON. MEMBERS: "Ask a question."]—that it will do the greatest service to the Scottish people's argument for devolution, because if Sir Ian MacGregor does as much for the Tory party as he did—

Mr. Speaker: Order. I think that this matter would be better raised in the debate.

Mr. Rifkind: I can only say to the hon. Gentleman that I think that it is thanks to the work Sir Ian MacGregor did for the steel industry that Ravenscraig can look forward to the next seven years.

Court Actions (Costs)

Mr. Doran: To ask the Secretary of State for Scotland what are the costs to the Government of the recent court actions raised in Scotland against The Scotsman and Glasgow Herald newspapers and Scottish Television.

Lord James Douglas-Hamilton: The expenses of the court actions and liability for their payment will be known only once the actions are concluded.

Mr. Doran: From my knowledge of legal expenses, I think we can assume that those expenses will be considerable. The Minister has already criticised certain councillors of all parties who travelled to London last week to give a very useful presentation on the poll tax. Does the Minister not consider that the expenses that will be incurred in these fruitless actions, which are simply intended to prevent any part of the media from criticising or embarrassing the Government, constitute a useless and outrageous waste of public funds?

Lord James Douglas-Hamilton: No, Sir. I believe that the Government were absolutely entitled to uphold the confidentiality owed to the Crown by present and former members of the security and intelligence services. The Government consider that the action they took was entirely necessary in the circumstances.

Housing

Mr. McKelvey: To ask the Secretary of State for Scotland when he next plans to meet representatives from COSLA to discuss matters related to housing.

Mr. Rifkind: No date has yet been fixed, but my hon. Friend the Parliamentary Under-Secretary responsible for home affairs and the environment, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), holds regular meetings with the convention.

Mr. McKelvey: Am I correct in thinking, then, that the right hon. and learned Gentleman will be aware of the views of Scotland on the housing crisis in Scotland today? Nearly 1,250,000 people, including families, are living in overcrowded conditions. About 200,000 people are on the waiting lists. Some 31,000 are regarded as homeless. In Kilmarnock alone there are 2,000 on the single homeless list, with 600 of them now being regarded as deserving top


priority. Will the right hon. and learned Gentleman consider COSLA's view that the Housing (Scotland) Bill now going through Committee does nothing to alleviate the problems of all those very unhappy people?

Mr. Rifkind: Given the hon. Gentleman's interest in the housing problems of Kilmarnock, I would have thought that he would welcome the fact that the Government's housing allocation on the housing revenue account block to Kilmarnock and Loudoun district council for the current year represents no less than 97 per cent. of what the council felt it needed.

Mr. Forth: In the context of the housing matters referred to, can my right hon. and learned Friend comment on rent levels in Scotland? Does he believe that these are appropriate to modern and future conditions, and how do they compare with those south of the border?

Mr. Rifkind: It is the case that rent levels in Scotland remain significantly below rent levels elsewhere in the United Kingdom, although average earnings are comparable.

Mr. Home Robertson: Is it not significant that the Secretary of State is answering his hon. Friend the Member for Mid-Worcestershire (Mr. Forth) in such a friendly way? Is it not a fact that the hon. Member has probably had more influence over housing decisions in Scotland than all the homeless, the overcrowded and the people living in sub-standard conditions in Scotland? Why is the Minister bringing forward legislation which will be of substantial benefit to private landlords, but which will do nothing to meet the housing needs of the people of Scotland?

Mr. Rifkind: If the hon. Gentleman believes that the housing legislation before the House will not help the housing requirements of the people of Scotland and that they will not be interested in its provisions, he and his colleagues might like to reflect on the fact that in the last week 1,000 tenants in Castlemilk have voted to have their houses transferred to the forthcoming Scottish homes organisation, in the knowledge that that might involve higher rents, but that it would also involve the refurbishment and improvement of the houses they live in.

Local Government (Tayside)

Mr. Bill Walker: To ask the Secretary of State for Scotland if he will call for a report from the chief constable of Tayside police on the progress of inquiries into allegations of misconduct in local government.

Lord James Douglas-Hamilton: There are no current inquiries by Tayside police specifically into allegations of misconduct in local government.

Mr. Walker: My hon. Friend will have seen the reports in the Scottish media which link the problems of local government in Dundee with activities in the Labour party. Can my hon. Friend tell the House when these matters will be dealt with, so that the suffering of those affected by the allegations can be brought to an end?

Lord James Douglas-Hamilton: In answering on behalf of the Lord Advocate, I understand that inquiries concern the alleged misappropriation of funds. I am advised that the police will report to the procurator fiscal as soon as their inquiries are completed.

Mr. Ernie Ross: Will the Minister confirm that it was at the request of officials of Dundee Labour party that the police were called in in the first instance and that they are as anxious as anyone to have the matter cleared up as quickly as possible?

Lord James Douglas-Hamilton: Yes, Sir. I am advised that most of the allegations were first intimated to the procurator fiscal by the hon. Member for Aberdeen, South (Mr. Doran).

Day Centres

Mr. McAvoy: To ask the Secretary of State for Scotland what steps he is taking to encourage joint funding of day centres for elderly people in Scotland.

Mr. Michael Forsyth: The provision of services for groups such as the elderly is a matter for individual health boards and local authorities in the light of local needs and circumstances.
My right hon. and learned Friend has encouraged health boards and local authorities to make full use of joint funding. Places for the elderly in day centres provided by local authorities and voluntary bodies had increased since 1979 by 61 per cent. to a total of 5,690 at March 1986.

Mr. McAvoy: I thank the Minister for his answer. I hope he accepts that in Scotland, and in my constituency in particular, there is a high proportion of elderly within the community. In Strathclyde region, where there is a first-class, prudent authority, as instanced by the recommendation to increase its rate for the next financial year by only one pence, will the Minister consider seriously injecting further finance into the health board so that it may co-operate with the local authority in providing more of these much-needed centres?

Mr. Forsyth: The increased finance that has been provided to the health boards since 1,979 amounts to some 26 per cent. in real terms. The increased finance made available to the local authorities for this purpose as part of their social work services has increased in real terms since 1979 by some 36 per cent. That is a record to be proud of, and the hon. Gentleman must acknowledge that considerable progress has been made.

Mr. Foulkes: Is the Minister aware of the concern in Ayrshire about the proliferation in the number of old people's homes and nursing homes, causing consequent strain on the Health Service and social work services? Has he seen the proposals put forward by Age Concern Scotland about the registration of private nursing homes and old people's homes because of the concern over the exploitation of old people to provide profit for the owners of some of these homes? Will he consider legislation along the lines proposed by Age Concern Scotland?

Mr. Forsyth: The hon. Gentleman does the private sector, which provides excellent care for many people in Scotland, and proportionately more in England, a great disservice by implying that, because these homes are private, there is any question of lower standards. As he will know, the Government intend to make regulations to ensure that the highest standards continue to be maintained.

Scottish Bus Group

The Secretary of State for Scotland (Mr. Malcolm Rifkind): With permission, Mr. Speaker, I should like to make a statement about the future of the Scottish Bus Group.
The Scottish Bus Group is a nationalised industry, providing bus services in Scotland. It has a total staff of about 10,000. In its latest annual report, covering 1986, it showed a turnover of £160 million. The Scottish Bus Group has over 3,000 buses and in terms of vehicle miles is responsible for over half of stage carriage services in Scotland. Through its 12 subsidiaries, it is Scotland's largest provider of bus services.
I have decided that I should now seek powers at an early opportunity to privatise the Scottish Bus Group. [HON. MEMBERS: "Hear, hear."' All nationalised industries which have been privatised have benefited from taking control of their own affairs. I am sure that the Scottish Bus Group will be no exception. Privatisation will allow investment decisions to be made in Scotland, free of the Government's constraints on nationalised industry financing. Management will be free to manage, the travelling public will benefit from the greater sensitivity to the market which a private sector company necessarily has. Deregulation has already achieved much in that field, with increased competition and innovation. I am presently considering whether the Scottish Bus Group should be privatised as a single company or as several regional companies.
Whichever method of privatisation is chosen, there will be benefits to the Scottish economy. It will be strengthened by the addition of one or more new private sector firms providing substantial employment and free to take full advantage of market opportunities. The privatisation of the bus group will complement the major stimulus to be given to the Scottish economy by the privatisation of the electricity industry.
Privatisation should also provide opportunities for the work force, at all levels, to take a stake in the business for which they work. This increased sense of involvement should also lead to improved performance. The work force as a whole should benefit from being part of an organisation which has been set free to operate in a fully commercial way.
This decision will have implications for Caledonian MacBrayne which, together with the Scottish Bus Group, makes up the Scottish Transport Group. Caledonian MacBrayne is responsible for providing ferry services on the west coast of Scotland. I shall be considering the best future arrangements for Caledonian MacBrayne, consistent with our commitment to the provision of shipping services to the islands.

Mr. Donald Dewar: The announcement that we have just heard will please no one but the placemen and the zealots. I thought that the source of the cheering behind the Secretary of State was highly significant and rather depressing. This measure may earn him some brownie points with the Prime Minister, but it will do very little for public transport in Scotland. It is a remarkable turnabout which has been largely unexplained.
The privatisation of the Scottish Bus Group was specifically rejected in the White Paper of August 1984, yet

suddenly the group is now to be sold off in very difficult trading conditions. Does the Minister accept that these are difficult and unsettled times and that many bus companies, particularly in central Scotland, are trading at a loss? Is he not aware of this from the fact that, in the calendar year 1986, the profit of the Scottish Transport Group, at £10·7 million, was over £6 million down on the previous year?
That was specifically ascribed by the chairman, in his report, to the difficulties which attended deregulation. Why, then, the further difficulty of sale now to an unknown buyer on speculative terms? Can the Minister says what impact he thinks that this will have on jobs? That is a highly relevant question, because we all know that there have been difficulties in the Scottish Bus Group. Kelvin Scottish, in particular, has been the subject of reports and of suggestions of a loss of about £3 million. One important depot, Milngavie, has already been closed. With 10,000 employees, is it not important that we know a little more about that side of what the Government propose?
I recognise that we cannot know today whether it is to be one company or 11 or 12 companies. There is a lamentable lack of specificity. May we be assured that the Minister will return to the House at an early date, as soon as decisions have been taken, with information? Will he confirm that primary legislation is needed? I presume that that is the implication of the phrase that he will "now seek powers", but I should like that matter cleared up. Will this be a sale by share tender, or will the Minister be looking for some existing company, possibly in the industry, to buy the Scottish Bus Group? What price does he expect?
Will the right hon. and learned Gentleman note that what happens to Caledonian MacBrayne is a matter of deep concern to the Opposition because it is an essential lifeline to island communities? Does he accept that we have little confidence in his touch in these matters? We, like many people who depend on Caledonian MacBrayne, will remember the fiasco of the Gourock-to-Dunoon run and Western Ferries' pre-emptive raid, with the right hon. and learned Gentleman's assistance. We remember also the sale of MacBrayne Haulage to Kildonan Transport, if I remember rightly at a knockdown price of £450,000. We hope that, if the right hon. and learned Gentleman insists on going ahead mistakenly with this exercise of selling assets, it will be carried out with greater respect for those who depend on the services, and for the public purse.
There is a great deal of talk of stimulus, of the freedom of management to manage, but the right hon. and learned Gentleman's statement is the worse sort of padding—specious propaganda bordering on claptrap. No case has been made out for this U-turn. Stripped of the advertising copy, it is nothing more than a bald, unsatisfactory, unacceptable statement of intent, and we will oppose it when it comes to the House in legislative form.

Mr. Rifkind: I bow to the hon. Gentleman's experience of specious claptrap and will respond to the points he raised. I share his view that the ferry services are a lifeline to the islands. That will be a fundamental consideration when determining future arrangements. I point out that Caledonian MacBrayne and the ferry services to the islands have improved enormously beyond all recognition over the past 10 years. If the hon. Gentleman will not accept my word on that, he should speak to those on the islands, who will be happy to confirm it.
As to the reasons for and the background to my announcement involving the Scottish Bus Group, the board of the Scottish Transport Group fully supports privatisation and believes that it will be in the interest of bus services in Scotland, and that this is the right way forward. Our experience since deregulation came into effect has shown that the Opposition's alarms and fears were competely unjustified and that deregulation has been to the benefit of bus services in Scotland. More bus services are available and competition has been to the benefit of those involved.
I confirm that these proposals will require primary legislation. As to the form of flotation, we shall of course seek advice from financial advisers but, in the light of experience elsewhere in the United Kingdom, it is likely that there will be interest among the management and employees as well as others, depending upon the type of structure which is eventually determined.
Given that, over the past 30 years, there has been a decline in bus services throughout the United Kingdom, including Scotland, the increased competition which this decision will ensure will be of great benefit to those who use bus services and therefore very much in the interests of those who work for the Scottish Bus Group. They can only benefit from being part of a successful private sector industry, and that will be the effect of these proposals.

Sir Hector Monro: Does my right hon. and learned Friend agree that this is the moment for the bus industry to show initiative and enterprise and to go ahead and develop its services, especially on the major trunk routes? Would the Minister also keep in mind during his consultation the issue that has already been raised about employment, and particularly the development of rural services?

Mr. Rifkind: Yes, I very much confirm what my hon. Friend has said. It is factors such as these that we will take into account when determining the precise structure under which privatisation will take place.

Mr. Charles Kennedy: May I bring the Secretary of State back to his rightful acknowledgement of the fundamental concern about the ferry services, not least for the employees but also for the communities and the many others dependent upon them? Referring earlier to the Scottish Transport Group, the Minister said that it had not been decided whether to have one monopolistic concern or to break it up regionally. What is the implication of that thinking for the ferry services? Does the Minister propose to privatise ferry services as one group, or is he looking at individual routes which may be sold off to individual companies which may bid for them?
Would the Minister address himself to the very simple fact that, taking my own constituency, the ferry services to the Isle of Skye and the feeling that, even with a level, of public subsidy, the fares are extremely high, when it comes to considering the replacement of ferry vehicles, it is very difficult to see how something that is economically viable can at the same time serve the public interest?

Mr. Rifkind: My statement today was solely concerned with the Scottish Bus Group. Nothing in it involves any decision having been taken with regard to the future of Caledonian MacBrayne, with the exception that the privatisation of the bus group will mean the end of the

Scottish Transport Group as such, because Caledonian MacBrayne would be the only remaining element in it. We have yet to come to a view as to the future organisation of Caledonian MacBrayne and the extent to which either privatisation or some other arrangement would be appropriate for that organisation.
What I have said is that our prime consideration is to ensure that this vital lifeline for the islands, which we have built up over the past ten years, is maintained insofar as it is the necessary transport facility of those who depend on it.

Mr. Alick Buchanan-Smith: Will my right hon. and learned Friend acknowledge that all experience of privatisation so far suggests that the removal of Government interference in management is to the ultimate benefit of both management and the users, the customers, of the services in question?
At the same time, following on what my hon. Friend the Member for Dumfries (Sir H. Monro) said, will rural services be taken into account in my right hon. and learned Friend's consideration? The need for them does not change, whether the service is nationalised or privatised. They are an important social service and for many are the only link with centres of population for shopping and so forth. That is a major consideration.

Mr. Rifkind: My right hon. Friend is absolutely correct in the priority that he identifies. I will simply add that up to now the investment decisions involving the Scottish Bus Group have had to be made by Government in the context of their overall public sector borrowing requirement. That is true of all nationalised industries. In future, these decisions will be taken in Scotland by the management of the new company or companies, and will be taken on the basis of the perceived needs of the Scottish Bus Group.

Mr. Alistair Darling: Is the Secretary of State aware that there is a great deal of concern that control of the Scottish Transport Group or the Scottish Bus Group, when it is sold off, will pass out of Scotland, perhaps to London or even abroad, and that a new owner living in London or the Gulf will care little about when the last bus runs and how much it costs? Is he also aware of the concern that Caledonian MacBrayne has received large sums of public money to modernise its fleet which, by the 1990s, will be very new and that it would be quite wrong for someone to snap up a bargain, into which public money has been poured, at a knockdown price, as has happened elsewhere?

Mr. Rifkind: In answer to the first part of the question, I do not remember the hon. Gentleman complaining when the Perth-based Stagecoach bus company successfully acquired one of the English bus companies after the privatisation of the National Bus Company. I have every faith in the Scottish bus companies being able to make a major contribution to the improved well-being of the Scottish economy. As regards Caledonian MacBrayne, any future decision, if it did involve some form of privatisation, would obviously be subject to the same principles with regard to public assets as has been the case with other nationalised industries.

Mr. Nicholas Fairbairn: May I congratulate my right hon. and learned Friend on freeing from bureaucracy and Treasury control a service of the greatest importance to people in Scotland, to be run, I


hope, by several competing companies—that would be my preference—for the benefit of those concerned? As regards bus provision in the countryside, at the moment only private companies provide the sort of facility that shoppers want, taking them to the places where they can shop at the time they want to do so or, like Stagecoach, giving them the service that they really require. My right hon. and learned Friend is greatly to be congratulated.

Mr. Rifkind: I am grateful to my hon. and learned Friend. I agree that these proposals represent an exciting opportunity for the bus industry and for those who work in it.

Mrs. Margaret Ewing: On what basis does the Secretary of State make his confident claim that privatisation will automatically lead to an improvement in services? Has any research been undertaken? Have there been any preliminary soundings among people who might be interested in taking over bus services? I reiterate the point that has been made by other hon. Members —rural communities are dependent on bus services as lifelines. Any company interested in services in rural areas, such as my constituency, should be asked to take full cognisance of the need to offer an efficient and effective service.

Mr. Rifkind: Those who run the Scottish Bus Group believe that these proposals will be in the interests of the bus services that it provides. I would be somewhat puzzled if the hon. Lady and her colleagues were opposed to the transfer of ownership of the Scottish bus industry to Scotland from London, where it presently operates.

Mr. Bill Walker: My right hon. and learned Friend should be congratulated on the measures that he is proposing to introduce. Will he confirm that, contained in these measures, whatever they are, there will be a requirement that employees will be given an opportunity to purchase shares in the new company or companies, whatever form they take? Employee shareholdings are an essential part of changing attitudes, which will be required if we are to improve services.
With regard to rural services in my constituency, there is no question but that one of the advantages of deregulation has been competition. It has brought about circumstances that I have never known before. Bus companies have been prepared to divert and re-route their buses for the benefit of people living in small communities. That would never have been achieved before deregulation.

Mr. Rifkind: I am grateful for my hon. Friend's experience of the benefits of deregulation. I agree with his objective of encouraging share ownership. I have no doubt that the people of Scotland and the employees of the Scottish Bus Group will be especially interested in the opportunities that this will present for the greater involvement of the public, including employees, in the ownership of an important industry in Scotland.

Mrs. Maria Fyfe: Has the Minister considered what the feelings of many Scottish people will be when they hear this news and realise that bus companies will chase profits by concentrating on the most profitable routes and times? Those people will be condemned to stand for long periods in the wind and rain waiting for a bus to arrive.
I notice that the Under-Secretary is smiling. He obviously thinks that it is funny to stand under a draughty bus shelter with small children in the cold. He has probably never had to do so. It is very easy for people such as him who ride around in ministerial cars. This is a piece of vicious class legislation. It will affect those who rely on buses, such as women with young children and elderly people going to the shops or to their doctor. Those people are forced to rely on public transport, and what you are doing—

Mr. Speaker: Order.

Mrs. Fyfe: I beg your pardon, Mr. Speaker. It is clear that we can expect no benefit to services from this measure. Have the Government investigated the needs of the people that I have mentioned?

Mr. Rifkind: As the hon. Lady has been one of the foremost critics of the Scottish Bus Group, which is a nationalised industry, and its attempts to introduce competition in Glasgow, I am rather puzzled by her anxious desire to defend the status quo.

Mr. Gerald Howarth: Is my right hon. and learned Friend aware that it is only under this Government that the bus industry has been rescued from terminal decline? Will he accept from us that what he has announced is welcome news? It is typical of the whingeing Opposition parties that all they want to do is stick their collective snouts into the public trough.

Mr. Rifkind: For the past 30 years, the use of buses throughout the United Kingdom has declined. The combination of deregulation and privatisation of these bus companies will offer the first serious opportunity for many a long year to reverse that decline in the use of buses, in the interests of the general public.

Mr. Archy Kirkwood: The statement that the Secretary of State has made is so vague as to be almost meaningless, and it makes it very difficult for people who are trying to make an objective — not an ideological—judgment about whether this measure is to be supported or not. We are prepared to look at the proposal for the buses, but if the Secretary of State is thinking of privatising the ferries, he will run into stout opposition from Members on these Benches and from Members in other parts of the House.
As to the date, the Secretary of State said that he would take an early opportunity to take powers. What does an "early opportunity" mean? There is worry that the phasing out of public sector subsidies, which are due to end in 1991, will be conterminous with the introduction of the powers that he may wish to take. That will mean that there will be no central Government subsidy, which will leave local authorities to carry the can. That would be unacceptable in rural areas.
I welcome the statement that the Secretary of State has made about the opportunities for management and, we hope, staff buy-outs. Last, but most important, we would favour these proposals only if they are carried out on a regional basis, because otherwise it is impossible to protect individual companies from predatory depredations of companies from out of the Firth of Scotland.

Mr. Rifkind: So far as I could tell, I think that the hon. Gentleman was saying was that he gives a cautious and qualified welcome to the proposed privatisation of the Scottish Bus Group. Unless I am mistaken, I am grateful


to the hon. Gentleman for that. As far as Caledonian MacBrayne and ferries are concerned, I have said that we have not yet come to any conclusion about the future organisation or structure of the ferries, including whether and to what extent privatisation would be appropriate. The supreme consideration will be to ensure the maintenance of healthy ferry services to the island communities. There are other ways in which, in theory, it might be possible to do this.
For example, the hon. Member for Orkney and Shetland (Mr. Wallace) will be aware of that support for those islands communities is organised in a different way. The islanders are provided with services mainly by P and O and other smaller companies. There are other options. Therefore, it is important not to come to a speedy conclusion on these matters, but instead to examine all the possibilities that might be available.

Mr. Michael Fallon: Is this not clear evidence that, at long last, after eight and a half years, the fog of political cross-subsidy and bureaucratic Socialism is finally lifting in Scotland? That will be warmly welcomed by bus passengers throughout Scotland. Will my right hon. and learned Friend turn his attention to other parts of the British Scotland Corporation that might benefit from similar freedom of management to run good Scottish businesses without further political interference?

Mr. Rifkind: I am sure that the levels of political support in both Scotland and the north of England are matters that equally attract the attention and interests of my hon. Friend. I am sure that we shall be able to apply similar principles in both parts of the United Kingdom.

Mr. Ron Brown: The Secretary of State and the Government have sold the family silver, no doubt at a knockdown price, to his friends in the business community. Is it not true that, increasingly, within this country and within the Labour party, there will be demands for renationalisation of those public assets without any compensation and under workers' controls? Is that not real democracy, and will that not come in time?

Mr. Rifkind: I can appreciate the hon. Gentleman's aspirations in this matter, but he will expect me to conclude that he is hardly likely to persuade the Government until he has persuaded his hon. Friends.

Mr. Eric Forth: I join my hon. Friend the Member for Darlington (Mr. Fallon) in welcoming this further stage in the journeying of the Scottish Office towards Conservatism. Has my right hon. and learned Friend yet had time to read the proceedings on the Transport Act 1985? During the Committee proceedings on that Act, those of us who have the privilege to be members had to listen to Labour Members telling us of the doom and gloom that would come from the successive privatisations and deregulations of the buses, all of which have been proved wrong. Will my right hon. and learned Friend take heart from this fact and, when he has any moments of doubt, re-read the proceedings on the Act and gain a new confidence?

Mr. Rifkind: I say in the kindest possible manner to my hon. Friend that if he had ended up representing a Scottish rather than an English constituency, the Scottish Office might have approached the Conservative ideal for which both he and I stand that much earlier.

Mr. Tony Worthington: What is to happen to the rumoured £25 million-worth of reserves of the Scottish Transport Group? How are they to be distributed? Since a consequence of deregulation of buses in the Kelvin Scottish area has been the acquisition of a clapped-out bus fleet, the loss of one garage and £3 million of losses, who will buy that without the consequence being a massive loss in the number of journeys available to constituents in that area?

Mr. Rifkind: On the financial arrangements. I shall shortly be appointing financial advisers to make recommendations to me on these matters. We shall then be in a position to ensure that the best possible method is used.
On the other matters to which the hon. Gentleman referred, he will appreciate that whether the Scottish Bus Group is a public or private sector company, it would do devastating damage to its long-term future if it did not make whatever economic decisions were necessary on the use of its assets and other such matters.

Mr. Neil Hamilton: Does not my right hon. and learned Friend consider it paradoxical that Opposition Members, who are presumably keen to get the best value for money when their own money is involved, have no interest whatever in the principle when they think that we are spending someone else's money'? Is not their concern for jobs bogus? Instead, they seem to be concerned with preserving non-jobs. If jobs are providing services that people want to buy in the market place, they will be as safe after privatisation and competition as before.

Mr. Rifkind: I do not think that Opposition Members' concern for jobs is bogus; it is simply confused.

Mr. Sam Galbraith: As the Minister knows, Kelvin Scottish is an important company in my constituency. It is one of the largest employers and in large parts of my constituency it provides the only form of transport. I have to deal with the problems, as do some Conservative Members, confronting rural areas. In that context, and further to the question asked by my lion. Friend the Member for Edinburgh, Central (Mr. Darling) does the Minister intend to take any steps to ensure that the control of any new companies is retained in Scotland, or will it be possible for that control to move elsewhere?

Mr. Rifkind: As the hon. Gentleman will be aware, there is no legislative provision—under this Government or any previous Government—dealing with the control of a particular company in any one part of the United Kingdom. That is the legal position, and it has not arisen since 1979. It has flowed from the policy of all Governments—Labour as well as Conservative—as we live in a single United Kingdom economy.

Mr. John Marshall: Will my right hon. and learned Friend ensure that special concessions are given to employees of the group when the industry is denationalised, so that the workers can have a special stake in the future success of the company under private control?

Mr. Rifkind: I assure my hon. Friend that we shall be giving close and sympathetic consideration to that kind of approach.

Mr. Brian Wilson: Will the Minister agree that his complete failure to reassure the


people of Scotland about the future of services —particularly rural routes and other unprofitable routes—under the arrangements will be noted with apprehension? Will he further agree that his failure to give firm commitments on the future of Caledonian MacBrayne as an integrated unit serving the Scottish islands will be greeted with similar apprehension, not least by the excellent people who maintain the services in conditions that most of us would baulk at working in?
Will the Secretary of State recall the last Scottish Office transport privatisation? It sold off £1·5 million-worth of assets of MacBrayne Haulage to Mr. Billy Walker for £450,000. At that time, Mr. Walker was asked whether he thought that he had received a bargain. He replied:
It would be a stupid man who didn't think that. An asset-stripper taking over this firm would have made a fair profit for the money. We have no intention of doing that.
Will the Secretary of State consider that Mr. Billy Walker, who was handed this valuable public asset on a plate, is about to sell MacBrayne Haulage —Kildonan MacBrayne, as it now is — to a firm in Yorkshire without a whit of social guarantee for those who rely on the services? Is that the policy that the right hon. and learned Gentleman intends to pursue? If so, can he not easily understand why his party is a discredited rump in rural, as well as urban, Scotland?

Mr. Rifkind: I am not quite clear from the hon. Gentleman's splendid but somewhat empty rhetoric what his conclusions are. If a Scottish company had purchased an English company, would he have condemned that in similar terms, and if not, why not?

Mr. Wilson: What about the knockdown price?

Mr. Tony Favell: Is my right hon. and learned Friend aware that, although we are glad for Scotland, the new wind of free enterprise that is blowing through Scotland is regarded with some apprehension elsewhere in the United Kingdom? It will undoubtedly attract back to the country those entrepreneurs who were so famous in Scotland. Our gain will be your loss.

Mr. Rifkind: It is certainly the case that Scotland's major contribution to the industrial growth of the United Kingdom was based not on Government funds but on the ingenuity of the enterprise and initiative of the Scots themselves.

Mr. Bill Walker: On a point of order arising out of questions, Mr. Speaker.

Mr. Speaker: Order. It does not have to arise out of questions.

Mr. Walker: I advise you and the House, Mr. Speaker, that the Billy Walker who was referred to in the question that was asked by the hon. Member for Cunninghame, North (Mr. Wilson) is not me, nor is he a relative of mine.

Telephone Talkabout (Abolition)

Mr. Terry Lewis: I beg to move,
That leave be given to bring in a Bill to prevent the use of the national telephone system for the purpose of joining together several telephone users at a time for casual conversation.
I make no apology for returning to the subject so soon after having raised the matter in December by the same means. The objective of the Talkabout service is to join up to 10 people at random–10 young people, usually—in casual telephone conversation. When so joined, they engage in what is mainly idle chatter, and which mostly, to say the least, is banal. That sounds fine and harmless, but there are five main complaints to which I draw the attention of the House. They are the obscene conversation that takes place; racist comments, which are usual; the costs; the addiction that young people suffer; and the exchange of phone numbers to make dates with perfect strangers—"imperfect strangers" is probably a more apt description.
One need say little about obscene conversations and racist remarks. To start with, they are contrary to the telecommunications legislation. There are procedures by which they could effectively be dealt with outside British Telecom. That has not happened. If anybody argues that racist comments and obscene conversations do not take place, the evidence of my own ears argues the contrary.
The cost of the service to the consumer is tremendous. The problem is that British Telecom gears its advertising to young people, who, mainly, are not subscribers to the telephone service. That is a bad business ethic. It is immoral for a huge corporation such as British Telecom to advertise in that way. It is tantamount to encouraging young people to steal.
I show the House a Talkabout bill. This bill was sent to me by a constituent of an hon. Friend in the north-east. He received a bill of £351 and complained to British Telecom. He was told that it was a bona fide bill and that he had to pay it. He subsequently paid British Telecom for a computer printout of his bill. I show the House the computer printout, nine tenths of which comprises calls made by his 15-year-old son to the Talkabout service. That consumer is still strenuously arguing with British Telecom that he should not have to pay the bill. The service is driving people into debt. People innocently think that their telephones are being reasonably used by their families, but, usually, a youngster in a family is not using it reasonably.
I draw another problem to the attention of Conservative Members in particular. Small business men are in the same boat as parents. Small business men who employ young people may find that their telephone bills have escalated. I suggest that they quickly get on to British Telecom and get a printout. They will find that their profits are rapidly going down the drain. I sincerely hope that that matter interests Conservative Members.
One of the worst examples of despair that has come to my attention through another hon. Friend concerns a young lady in Scotland —a 15-year-old girl. When her mother received a bill for £397, she attempted to commit suicide. That young lady spent a long time seriously ill in hospital. Thankfully, she is now on the mend. From conversations that I have had, I do not believe that British Telecom is working hard to help that family's problem.
Young people have written to me stating that they are addicted to the Talkabout system. They are addicted in the same way in which people are addicted to one-armed bandits and fruit machines. Of course, it leads to escalating bills and the matrimonial and family problems to which I have referred.
Another problem is potentially more serious. It is the exchanging of telephone numbers. One example occurred not far from the House. After an exchange of telephone numbers, three young girls were abducted, not to put too fine a point on it, by an ill-disposed man.
For the best part of two years, British Telecom has claimed that it is capable of monitoring the problem. That is not so. It cannot effectively monitor and control callers, mainly because there are up to 10 people on a line. Some monitors look after more than one line, and many more than one line in some areas. Control, perforce, is reactive. British Telecom can react only after an obscene comment is made, after a rascist comment is made, and only after telephone numbers are exchanged.
In addition, the young people who know that this campaign is running and that the House is examining the service, have invented their own ways of circumventing British Telecom's weak control. They have a code by which they swap telephone numbers. They have all sorts of ingenious ideas for getting into the service when the service has been stopped. I shall give the House an example. It is part of the addiction.
I have evidence that some parents have taken their home telephone instruments to work to stop young people using the system. Young people then go to the cheapest shop around the corner and buy £5 made-in-Hong Kong telephones, and plug them in to run up their parents' bills. Even more ingenious young people take the tops off telephones. They know which part of the system to tap to get into the service. It cannot be locked up. Young people cannot be stopped by taking telephone instruments away.
Before anybody tells me that parental control and responsibility are involved, many hon. Members who are parents who know how difficult it sometimes is to keep an eye on one's offspring. I do not mean that in a malevolent fashion, but I hope that it strikes home to those hon. Members who might not respond positively to the matter.
I am convinced that British Telecom, whether well motivated or not, cannot police the system, from which it is making an inordinate profit. I cannot accept that monitoring is effective. I cannot believe for two minutes that any senior manager, from the director down, would wish such an obscene, addictive and costly service to go to the people of this country. If British Telecom cannot act, the House should.

Question put and agreed to.

Bill ordered to be brought in by Mr. Terry Lewis. Mr. Ken Eastham, Mr. Dennis Canavan, Mr. Tony Blair, Mr. Robert Litherland, Miss Marjorie Mowlam, Mr. Peter L. Pike, Mr. Lawrence Cunliffe, Mr. George Howarth. Mr. Ian McCartney, Mr. Bruce Grocott and Mr. David Young.

TELEPHONE TALK ABOUT (ABOLITION)

Mr. Terry Lewis accordingly presented a Bill to prevent the use of the national telephone system for the purpose of joining together several telephone users at a time for casual conversation And the same was read the First time; and ordered to be read a Second time upon Friday 12 February and to be printed. [Bill 91.]

PUBLIC ACCOUNTS

Ordered, That Mr. William O'Brien be discharged from the Committee of Public Accounts and Mr. Graham Allen be added.—[Mr. Foster.]

Opposition Day

8TH ALLOTTED DAY

Government of Scotland

Mr. Speaker: I must announce to the House that I have selected the amendment in the name of the Prime Minister.

Mr. Donald Dewar: I beg to move,
That this House welcomes and endorses the proposed reform of the structure of government in Scotland contained in the Scotland Bill presented in the House on 12th November 1987; and, believing that it both reflects the strongly expressed wishes of the people of Scotland and would strengthen the United Kingdom, calls for the setting up of a directly elected Assembly in Scotland with fiscal powers and legislative responsibility for Scotland's domestic affairs.
I begin by giving an assurance to the Secretary of State for Scotland that I do not regard this as a debate about why he did not mean what he said in 1976. I imagine that he will be grateful for that, because the alibi that he has so carefully constructed over recent months is pretty thin. He is a man with previous convictions in the eyes of the Government. In Scotland he has an honourable history, which, sadly, is now being rewritten. It is very much a scissors and snopake job but the record is there for all to see. The explanation that he has offered, if never less than agile, is nowhere near convincing.
I am not interested in the Secretary of State's old speeches, but I am interested in one or two of the things that he said in the debate before Christmas, on 23 November 1987. He argued then, in a remarkably blatant way, that his allegiance in the early days to devolution was based on the electoral arithmetic of the day and that it was not a matter of principle but of expediency. He put that argument forcefully during the debate, when he said:
The argument then was that such was the demand from the people of Scotland—and indeed of Wales— for some constitutional change, however illogical, and however much it failed to answer the fundamental point … we must make that change because the break-up of the Union was the … alternative.
The right hon. and learned Gentleman went on to say:
It if became clear that certain constitutional changes were required to ensure the future of the Union, whatever doubts many of my right hon. and hon. Friends and I might have, we are so attached to the Union of the United Kingdom that we would reluctantly be prepared to see those constitutional changes made."—[Official Report, 23 November 1987; Vol. 123, c. 37–39.]
That was a quite remarkable gloss on the speeches that the right hon. Gentleman had made. It was especially odd because, at column 42 of the same debate, he stated that in his view the arrival of Scottish devolution would not necessarily lead to the break-up of the United Kingdom. That drove a substantial coach and horses through the argument that he had deployed. As I understood the right hon. and learned Gentleman, he was then showing a voluntary abdication of judgment and going for a cop-out of the most blatant and dishonourable sort. It was a case of, "public opinion rules, OK."
I advise the right hon. and learned Gentleman that if that was his position then, and presumably it is still his position today because it merely justifies his bombast on

devolution by saying that the people of Scotland do not really want it, what price the poll tax, or what justification for the privatisation of the Health Service? We might as well wipe the slate of the Scottish Office totally clean if we are to substitute public popularity for principle, as the right hon. and learned Gentleman asks us to do.
The right hon. and learned Gentleman will not be taken seriously. I do him the credit of believing that back in the late 1970s he said what he thought was right at the time. He has either changed his mind or silenced his conscience for other reasons — I do not know which — but he is certainly not doing any service to himself if he holds the idea that he did not believe what he was saying, and that in some way his resignation from the Opposition Front Bench over devolution was a personal act of idiosyncratic flagellation. If that is to be believed, it is, indeed, a Pyrrhic victory for the right hon. and learned Gentleman.
The Secretary of State is now trying to pretend that there is the silence of the grave in the Conservative party. We know that that is not true, because there are already rustlings in the undergrowth. There are probably some Conservative Members who have some sympathy —indeed, some have consistently shown sympathy — for devolution. Councillor Stevenson and Councillor Brian Meek and others are putting forward a case. I remember that in a splendid article, to which I have referred before, Councillor Brian Meek noted that the characteristic of Conservative Members of Parliament for Scotland was that they would jump into the sea if asked to do so by the Prime Minister, without stopping to take off their trousers. Little changes, even after the general election. However, at least that good councillor is proving that some Tories are not prepared to jump to each and every command.
For Labour Members, devolution is an argument based on the condition of Scotland and on the Scottish psychology. It is a debate about our place in the United Kingdom and our ability to contribute to a common cause. We believe that that is a strong and sound case that has been well made out. It is an argument about democratic control, about the control of almost 7,000 civil servants already in post, and about the sprawling mass of the Scottish Office administration. At the moment, one Minister covers, for example, a Health Service that is in crisis, and an education system that has recently been in turmoil and may well be so again if certain plans are pursued.
The other day I read a famous passage about the Minister's predecessor at the Scottish Office. He was described as a Pharos of Scotland:
who steered upon him was safe, who disregarded his light was wrecked".
Every appointment and every detail of the administration, and the placing of every policeman, was
the breath of his nostril".
That predecessor of the Secretary of State was a giant and was apparently omnicompetent and dominating, but when we looked to see who now sits in his place,.we see the hon. Member for Stirling (Mr. Forsyth). There must be a better way of running our affairs.
This country is gripped by a metropolitan obsession. Power is being focused more and more in Whitehall and in the Scottish Office. Initiative is choked, and discretion is now a luxury that is enjoyed in few elected council chambers. Experience proves, and has proved, over the past few years that the man from the Scottish Office does not necessarily know best.
The argument is about democratic control and how we exercise that control over the administrative devolution that is already in place. It is also an argument about legislative competence. It is bizarre—some people would use the word grotesque — that, for example, housing, education and health are in alien hands in the Scottish Office, and that the Scottish Office itself is being run as a sort of branch office of the Adam Smith Institute. It is not pleasant to watch the death of a liberal reputation and to hear the right hon. and learned Gentleman claiming common heritage and common cause with the hon. Member for Mid-Worcestershire (Mr. Forth), as he did only a few moments ago. That is not an encouraging phenomenon.
I want to make it clear that we are not arguing that the Government of the day do not have a right to govern. However, a Government with any wisdom, common sense or sensitivity would exercise their power differently and would think in terms of devolution of power. Not to do so is to fly in the face of so much evidence of public concern. The case for administrative efficiency is simply offensive.

Mr. Alex Salmond: So that we can be clear, on the subject of democracy and the Government's right to govern, does the hon. Gentleman accept that the Government have a mandate to govern Scotland, and is he arguing that the Labour party has a mandate to bring forward a devolution Bill?

Mr. Dewar: I cannot understand the hon. Gentleman's objection to us bringing forward a devolution Bill. I absolutely hate to think of the plaintive gnashing of teeth, the rending of clothing and the false hypocrisy that would have emerged if we had not done so. We are pleased and proud to stand by a good blueprint that was well worked out and well argued, and which is represented by that Bill.
I know that the Secretary of State will argue that in a unitary state one must accept the majority vote. That is the position that he puts forward. However, he must accept that Scotland is not just another administrative area within the United Kingdom. It is an entity—distinct, sometimes idiosyncratic, but always different.
The Scottish Office exists. There is a legal system in place — a corpus of separate legislation — and it is justified by our own particular Scottish approach to education and to local government, by our social priorities, and in half a hundred other ways. Apart from the self-appointed rabble of Scotophobes who now appear once a month for Scottish questions, who would want to abandon that tradition? Indeed, Tory Members and Ministers boast about their contributions to putting administrative devolution in place. If that is a cause for congratulations, what is so dangerous, revolutionary or wrong about parallel political developments?
The Bill that we have laid before the House, and to which we refer in the motion, is a substantial measure and puts forward a well-argued case. It is a realistic look into the future of Scotland. I accept that it is there to be shot at, but we are glad to take the flak: the case will stand it. Of all those who have talked about devolution or Scottish solutions, it is perhaps significant that the Labour party has done the work, put its detailed thoughts up front and shown the people of Scotland what we propose and want.

Mr. Michael Fallon: Granted that the devolutionary arrangements that the hon. Gentleman

presents to the House have been well argued and well worked out, will he explain what the cost will be once those arrangements are in place? What will be the assembly charge on each Scot, on top of the community charge?

Mr. Dewar: I shall come to the financial arrangements for the assembly in a moment. Although the hon. Gentleman may imagine that this is some enormous new charge on the people of Scotland, the Scottish Office and all its works are in place. The hon. Gentleman may find that regrettable. He may have become the enemy of everything Scottish now that he has fled to find his fortune south of the border, but for those of us who have a commitment to Scotland, and remain there, that Scottish tradition is important and ought to be fostered. The marginal — and I mean marginal — costs of the administration of the assembly are a small factor to weigh in the balance against the advantages, if it is accepted that they are advantages, of a better system of government.

Miss Marjorie Mowlam: I thought for a moment that the hon. Member for Darlington (Mr. Fallon) was going to rise in support of the Bill launched this afternoon by the northern group of Members of Parliament. However, he seems to have exported himself north of the border and deserted the people of Darlington.
May I ask my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) about his views on, and, I hope, support for, the Bill launched today by the northern group, which itself launches a northern regional assembly and northern development agency?

Mr. Dewar: I strongly welcome that initiative. —[Interruption.] We are attacked because it is said that there is no sympathy, no parallel movement, in other parts of the country; then we are attacked again when it becomes evident that there is. That, no doubt, would win cheap debating applause in certain artificial settings, but it has little to do with furthering proper debate on the government of this country.
My hon. Friend the Member for Redcar (Miss Mowlam) is right. One of the difficulties of the Scottish experience and the Scottish devolution argument 10 years ago was that it was unique. It was, in a sense, constitutionally lonely, and that set up some stresses and strains that were used effectively in the argument.
I welcome the fact that the point that I made about the centralisation of power — the need for influence and decision-making in parts of the United Kingdom outwith the London area—has led my friends from the north to come forward with imaginative and innovative proposals for a northern assembly and a northern development agency. If we achieve that kind of movement throughout the United Kingdom—for it is relevant not only to the north but to Wales and other parts of the nation—the case for Scottish devolution will be infinitely strengthened. My hon. Friend will find a warm welcome and strong support for the discussions that her group is launching in the north of England with a view to finalising and sophisticating an important initiative.
No one is trying to dictate what is the right solution for every part of the United Kingdom. We are merely noting that we are wrestling with common problems and moving in the same direction. Our particular solution is a directly elected assembly, with legislative powers, and a greater say for Scots within the framework of the United Kingdom.
I recognise, of course, that there are arguments on the other side. No argument is so complete that it cannot be challenged. Some people will say that it is all an additional tier of government, an unnecessary bureaucracy, but, as I have tried to point out, the civil servants are already in place and Westminster, by passing power and authority to Scotland by agreement, will be doing a job for the United Kingdom.
There may well be further changes. For example, I believe that there is a case for a move towards a one-tier, all-purpose local authority below an assembly, in terms purely of appropriateness of scale, but that is for the future. The important thing is to achieve that passing of power from the centre to the areas where it will have its impact.
There are, of course, arguments for and against what is a grand design, an important constitutional change. What I find unpleasant is the parish-pump politics approach that so often lies behind the opposition to devolution. Neville Chamberlain was said to look at the world through the wrong end of a municipal drainpipe, and I sometimes think that Conservative Members have the same noble sweep of vision when it comes to the devolution argument.
The other point of contention—and I accept that it is contentious—is what we have built into the Bill: a right to vary the level of public expenditure and revenue that is raised in Scotland. I consider that imaginative. I think it right that we should be able to vary the rates without affecting the yield taken by the United Kingdom Treasury, which is the effect of the scheme that we have devised. However, the Secretary of State is entitled to argue, as he did in the House on 23 November, that this is
the single most damaging element of the proposals". —[Official Report, 23 November 1987; Vol. 123, c. 44.]
I find that rather odd. The people who are saying that now are exactly the same people who, in 1978, were saying that an assembly without revenue-raising powers was constitutionally irresponsible. I suppose that we have become rather used to that kind of flexibility in recent years.
I believe, and I think that I carry all my hon. Friends with me, that if a directly elected tier of government is set up with those powers, it must have the necessary discipline of raising some of the money that it ultimately spends. I find it astonishing that the Minister's obsession with accountability, as has been illustrated in the argument for the poll tax, is so conveniently selective when it comes to a Scottish assembly.

The Secretary of State for Scotland (Mr. Malcolm Rifkind): Can the hon. Gentleman explain why he has not taken his argument to its logical conclusion? If an assembly is to have tax-raising powers, why should it not be responsible for raising all the money that it wishes to spend, rather than only a tiny fraction of it?

Mr. Dewar: I suppose that that is the new policy for local government announced by the Secretary of State. I suppose that he is going to apply a new principle. [Interruption.] It is a matter of balance. It is right that there should be a Scottish budget that is evolved in negotiation between, now, the Scottish Office — but, ultimately, the Scottish assembly—and the Treasury. We

are arguing that there should be a right to vary that on the margin, which seems to me an unexceptionable and sensible democratic procedure.
I am astonished that the Secretary of State is so gloomy in his assumptions about the future of his party in Scotland. When he says that it inevitably means Administrations with high public expenditure, he clearly assumes that the Scottish people will forever bar the door to any influence of power to his party if they are given the chance. That is a remarkable assumption for any politician to make.
There is also the insulting presumption that, while Westminster can be trusted in its stewardship of Scotland, any politician who is directly elected in Scotland cannot be so trusted: that he will have absolutely no interest in the future of Scotland's industrial base or commercial life and will cheerfully choke it with the crippling burden of taxation. Of course the powers will have to be used responsibly, but I trust Scots to use them responsibly. The right hon. and learned Gentleman does not, and that is the basis of his argument.
We want a comprehensive Health Service that is freely available. If that is under threat, if we are threatened with a two-tier service by Conservative policies, with those who can afford it baling out to the commercial medical sector, is it not right for Scotland to have an option to go another way? Is it not right for Scotland to have the financial machinery to tackle the problem, given that we already have separate legislation and a separate financial framework within the government of the United Kingdom?
I believe that the case is strong. I accept that it will give us difficulty, because there will be scaremongering on the other side, but if we stick to it, and argue for it with care and responsibility, I believe that we will win on that, as we will on the worth of the general scheme.

Mr. Bruce Millan: On my hon. Friend's point about scaremongering, will he clarify the exact powers in the Bill that will vary the rate of tax on individuals, but not on commerce and industry, in view of the misleading and frankly dishonest propaganda that we have heard about that in Scotland from Conservative Members?

Mr. Dewar: I do not know whether it was dishonest, but it was certainly misleading. I agree with my right hon. Friend that there is no power in the Bill to allow the Scottish assembly to vary commercial or corporate taxation. We are trying to strengthen the government of the United Kingdom. We will remain within the United Kingdom, and we will create a system for Scotland that will allow us to contribute more effectively to the common cause. Obviously, that reflects a balance that must be struck. The right balance has been tested in argument, and we will stand by it.

Mr. Rifkind: rose—

Mr. Dewar: I want to finish this important point.
We have built into the scheme a process whereby if there is a need to raise revenue — and of course the Scottish assembly must answer to the ballot box for its actions—it can vary the rates and the extra money will be available for the assembly to use. If it wants to cut taxation, that may be done. However, the United Kingdom yield must be maintained by an adjustment in


the block grant, which will be negotiated each year. That is simple. No doubt the technique and mechanics may be complicated, but the principle is clear and it will receive a response from the people of Scotland.

Mr. Rifkind: I am rather puzzled by the hon. Gentleman's response to the point raised by the right hon. Member for Glasgow, Govan (Mr. Millan). If local authorities can increase their marginal revenue by levying taxes on individuals, businesses and companies, why should the Scottish assembly, a much grander and more important body representing the will of the Scottish people — in the hon. Gentleman's view — not have a similar right which local authorities take for granted?

Mr. Dewar: Because we are devolving power to an assembly. We are giving it powers. We want to give it the powers relevant to its duties within the United Kingdom framework. The Secretary of State is being obtuse, although he is obviously enjoying himself. He is complaining bitterly that the scheme does not go far enough. If that is his complaint, let him bring forward amendments to our Bill; let him allow the Bill to be debated. If his real objection is that we are being too cautious in our approach I am surprised, but I am prepared to be tutored on that point.
We are producing a solution to a problem. The assembly will not be a talking shop. It will have substantial legislative powers, which will be increased and tidied up, with the inclusion of the universities and the legal framework within which the police operate. The assembly will have a budget in current terms of about £8 billion. It will have economic clout using section 7 of the Industry Act 1980, with control of the Scottish Development Agency and the Highlands and Islands Development Board. We are not claiming for it powers that it will not possess. We believe that it will be able to put Scotland's case effectively. It will he a competing centre of power and an advantage in an unbalanced land. Politics is about influence and pressure, as well as about legislation. I believe that the assembly will operate in both those senses.
We hear a blatant appeal to political fears from the Secretary of State and his colleagues. They argue that we are on a slippery slope to something very different. I note that the Secretary of State rather retreated from that during the debate in November, as I said earlier.
However, on one point the Labour party takes a different stand from that adopted by the hon. Member for Banff and Buchan (Mr. Salmond), who represents the Scottish National party. We see devolution as a means of strengthening the United Kingdom, establishing that it can respond to Scotland's needs. In a sense, I invite the House to know the scheme by its enemies. Although I believe that Scottish National Members will vote for us tonight for tactical reasons, ultimately the SNP will see devolution as essentially negative because it represents reform and not the break-up of Britain. Devolution and separatism are ultimately incompatible.

Dr. Dafydd Elis Thomas: The hon. Gentleman referred to the other national party within our group. Does he realise that within our group of national party Members we regard the transfer of power from London as progressive wherever it happens, as my hon. Friend the Member for Banff and Buchan (Mr. Salmond) argued? I am concerned to note the absence of colleagues from Wales on the Labour Benches today to

speak up for Wales and give Wales the same high level of support as hon. Members from the north of England are demanding. I congratulate the north of England on its initiative.

Mr. Dewar: I am delighted that the hon. Gentleman is congratulating the Labour Benches. I shall have to be satisfied with that rather grudging congratulation. However, I suspect that in time we may well be able to convince the hon. Gentleman that he should be more generous. I certainly hope so.
I have not been greatly impressed by the SNP's recent campaigning on this issue. The campaigning has been rather long on advice and short on action, if I may say that to the hon. Member for Banff and Buchan. Our late colleague Mr. Gordon Wilson called for a boycott of Parliament on two occasions, but he did that in vain, because his colleagues remained rooted to their seats. My hon. Friend the Member for Falkirk, West (Mr. Canavan) is now held up as a shining example of what others should do, but there is no sign of SNP Members following their own advice.
I genuinely tell SNP Members that I would have been more impressed if one SNP hon. Member had been present in the House to vote against the Second Reading of the Regional Development Grants (Termination) Bill, which killed regional development grants on Monday. The Scottish National party is hard at work portraying tonight's vote on this motion—while the big batallions will trudge through the Lobby and give the Government their majority—as a decisive setback. The hon. Member for Banff and Buchan told The Scotsman that the devolution option would no longer be on the table. I believe that that was said in an extremely hopeful fashion. It was wishful thinking.

Mr. Salmond: The hon. Gentleman will have the opportunity to hear me elaborate my thoughts on this matter later in the debate. What will the Labour party's strategy be once the motion is defeated tonight—as we know that it will be—for implementing its policy on which it fought and won the general election in Scotland?

Mr. Dewar: I shall not ask the hon. Gentleman what his strategy is, because I do not have sufficient interest to listen to his reply.
Our job is to campaign for what Scotland demonstrably wants, no more and no less than that. Nothing less than that will do. It would be a very poor politician who, if he lost a vote in the House, failed to move the Government miles in terms of their prejudice over a short period of time, packed, struck tent, went home and refused to carry on the struggle. That is not the way of the Labour party on this issue. We openly admit that we have a long way to go, because we are realists. We are in the realistic business of communicating what will happen and what our objectives are for the people of Scotland.
No doubt we will have to track back many a dreich and weary mile in the argument. No doubt there will be many echoes of the past. Doubtless the West Lothian question will reappear, probably during the course of the next half hour or so. No doubt the charge will be made that Scotland's influence at Westminster will be undermined. I accept that there are always reasons for buttressing doubt if the doubt exists and if people want to find those reasons. However, we should have a debate that does not involve myths or scare stories.

Mr. Nicholas Fairbairn: Referring to the matter of doubt, may I, as a Scottish episcopalian Jacobite bathed in scepticism, ask the hon. Gentleman whether, if the Labour party had been in power over the past nine years and had had a majority of the Scottish seats in Scotland, he would be seeking devolution?

Mr. Dewar: I imagine that the episcopalian Jacobite party in Scotland is probably just as strong as the Scottish Conservative party. However, in reply to the hon. and learned Gentleman, we have stuck with the devolution argument through good days and bad, through thick and thin. No one can say that we will not deliver or that we do not believe that devolution is right on its merits. It may well be that there is an argument about whether we should have it, but everyone knows on which side of the argument the Labour party stands. Everyone knows that there will be action when we next have a Labour Government.
Returning to the point made by my hon. Friend the Member for Redcar, I do not believe that we will lose our role and influence at Westminster. Our role may change. Scottish Members may not have to be jacks-of-all-trades, trying to cover the whole range of Scottish Office activities, but there will be more specialisation; for example, in foreign affairs, defence, economic and fiscal matters. It will be an important role. I certainly do not consider that we are trading power in Edinburgh for impotence at Westminster.
There is a different climate now, and there is a different thinking about regional government in other parts of the country. The northern Bill underlines that point. We are no longer isolated. We are part of a wider movement, with the strength that that gives.
The argument about devolution is a matter of conviction and gut root feeling about what Scotland wants. I believe that it has support. Even the new, reformed, sanitised Secretary of State has to concede that point. He dressed it up. He told The Independent that devolution was a preference in Scotland, not a priority. That is a nice distinction, but it will not stand him in good stead in the months ahead.
I believe that the preference is a strong one. It has been repeatedly illustrated and will grow because of the Government's insensitive policies. Its roots go deep. In the 19th century, Scotland was something of a fading memory. People were building British hotels and hiring elocution teachers to get rid of the last traces of a Scottish accent. However, the tide turned, as can be seen in many ways. The Scottish Office was set up in 1885, and since then we have built and improved, and we have tried to establish a structure in Scotland to serve Scottish needs. We wish to complete that structure by putting a parallel political and democratic roof on it.
There has been a growth of confidence in Scottish literature. Even in my day, Scottish literature was limited to "L'Allegro", "I1 Penseroso", "The Deserted Village" and one Shakespeare play. People are now becoming aware of Scottish literature. The feel for history in Scotland has grown beyond Scott's "Tales of a Grandfather." There is a sense of purpose. The legal system, the Church, educational and cultural traditions have survived and flourished, and we must build on them and harness them in the nation's interest.
I remember the impressive arguments of John McIntosh about dual nationality. All Scottish Opposition Members would agree that we are citizens of Scotland and

of the United Kingdom. Devolution strongly reflects that feeling. It is an important and pressing matter. The present situation is flawed and the danger is that flaws lead to fractures.
There is sometimes an air of beleaguered desperation about the Scottish Office. In a recent newspaper article the Secretary of State was driven to Hilaire Belloc, who said:
Whatever happens, we have got the Maxim Gun, and they have not.
That was an arresting and clever point, and shows that he has a good memory. It was also flippant, and says something about what is wrong in Scottish society and Scottish political life. The Bill is designed to meet a challenge. If Scotland ends up with an assembly, it will have the Maxim gun, but that will be Scotland's choice. The Opposition face that challenge, but are the Government prepared to face it, or will it be the status quo again, at whatever cost?
We have stayed with our argument. The Labour party has fought for devolution for decades, and we have won many victories, but we will achieve the ultimate victory only by convincing and probably by capturing government. We have made a pact with Scottish public opinion and we intend to carry it out. The motion underlines our commitment and determination to win through. I commend it to the House and hope that we will have solid support in the Lobby tonight.

The Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
`rejects the arguments for constitutional change that would be disruptive, unworkable, costly to implement and destabilising in their effect; and in particular rejects the added tax burden that would fall on the people of Scotland from a Scottish Assembly with tax-raising powers.'
I have listened with particular interest to the speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar). There is a distinct change in the tone of this speech. Unlike previous occasions, today we were not told about the "irresistible demand" for devolution from the people of Scotland. That irresistible demand changed to a "strong preference". If the hon. Gentleman now wishes to maintain that there is an irresistible demand, we are entitled to ask for evidence of that demand.
The evidence of a demand is normally considered on the basis of representations being made to the Government. I have made inquiries about recent representations made to the Government by those who have strong views on policy. The Labour party in Scotland is committed to and calls for devolution. However, the Government have received only 64 representations since the general election. On the other hand, the Labour-controlled Strathclyde regional council has committed itself to a certain education policy. The Scottish Office has received 2,555 representations on that issue. That is a helpful indication of relative priorities.
We were told by the hon. Gentleman that there is a major new move towards devolution.

Dr. John Reid: Will the Secretary of State give way?

Mr. Rifkind: I shall give way in a moment.
We are told that there is a major new movement in the Labour party, seeking devolution not only for Scotland but for the north of England, and no doubt for other parts of the United Kingdom.
The motion on the Order Paper is in the name of the Leader of the Opposition, who is committed to the policy put forward by the hon. Member for Garscadden.

Mr. David Marshall: Will the Secretary of State give way?

Mr. Rifkind: I shall give way in a moment.
On a previous occasion in the House, the Leader of the Opposition, speaking on devolution, referred to
the central misrepresentation of the whole devolution case—the idea that more houses can be built, more jobs found, more happiness manufactured … if only we have an Assembly."—[Official Report, 18 January 1977, Vol. 924, c. 153.]
The Leader of the Opposition now supports an assembly for Scotland, and perhaps one in the north of England. Why does the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas), representing Plaid Cymru, appear not to believe in one for Wales? If the fact that there are only 10 Conservative Members in Scotland somehow makes devolution essential, why does the fact that there are only eight Conservative Members in Wales not lead to a similar conclusion?

Dr. Reid: As the right hon.and learned Gentleman is interested in evidence of the demand for devolution in Scotland, I draw his attention to a recent poll, undertaken for Scottish Television in November 1987, which said:
Question 7: Do you think that the Government cares about Scotland? 20·1 per cent. answered yes: 79·9 per cent. answered no. Question 8: Which system is best for governing Scotland? 23·1 per cent. said the existing system: 52·2 per cent said a Scottish Assembly: 24·7 per cent. said independence".
When 77 per cent. of people are not satisfied with the present system and want at least some form of devolution, is that to be defined as demand or a strong preference?

Mr. Rifkind: We should attach the same value to the results of that opinion poll as we did to the results of the opinion poll during the general election campaign, which showed that 97 per cent. of Scots did not think that devolution was a major issue for the general election. The hon. Gentleman should bear that in mind.
The hon. Member for Garscadden, in presenting the Scotland Bill, hardly referred to it. Normally, when one presents a Bill, one devotes a substantial part of one's speech to its content. However, apart from a few cursory references to it in the hon. Gentleman's speech, it might never have existed.
I have looked at the Bill. It is an interesting and revealing document. In the history of the United Kingdom, there have been campaigns for greater power from certain areas and the language is significant.
There have been calls for home rule, demands for Parliaments and requests for a Prime Minister of the territories concerned. Perhaps we have given insufficient consideration during the past 10 years to why the Labour party has steered clear of such terminology.
There have been no references to home rule, only adherence to a much more clinical and sterile term—devolution — which is hardly likely to set alight any great passion or interest in such a mundane approach to the problems of government. There have been no calls for a Scottish Parliament, merely for an assembly, which, by

definition, has reduced relevance and significance. Most important, the executive head of the assembly to which the Labour party refers, is to be called not a Prime Minister, Premier or Chief Minister, but First Secretary — a magnificent title, normally more relevant to a senior official in a trade union or a senior official in the central committee of the Soviet Communist party.

Mr. Millan: That is exactly the terminology in the Scotland Act 1978, for which the right hon. and learned Gentleman voted.

Mr. Rifkind: The right hon. Gentleman is mistaken, and I shall explain why. I did not vote for the Scotland Bill on Third Reading.
The Labour party's reluctance to use the terminology that one usually associates with a genuine campaign for home rule is of great significance. The reason is quite simple. Opposition Members know perfectly well that the terminology which refers to home rule, to Parliaments and to Prime Ministers is the language of nationalism. They are conscious of the fact that they are opening a Pandora's box which they believe, by their addiction to a sterile indifferent terminology, they will somehow be able to conceal.
There is a basic and fundamental inconsistency between the Labour party's claim to speak for the Scottish people, and claiming that they deserve a legislature of their own, and its refusal to use the terms usually associated with such a political philosophy.

Mr. Salmond: Does the right hon. and learned Gentleman still hold to his view, expressed in Scottish Field in March 1986, that the powers of the Secretary of State for Scotland are not unlike those of a colonial governor?

Mr. Rifkind: I made no such remark. I am aware of that quotation, but it was never a remark made by me, as I have said on several previous occasions.
I repeat—I return to the point because it is of great significance—if the Labour party wants to maintain its argument on the basis that the needs and wishes of the Scottish people should be respected, why adopt such a meaningless concept as devolution? Why apply titles as insignificant as that of First Secretary? The Labour party will not attract millions to its banner on this issue if it campaigns on the slogan that every nation worthy of its name is entitled to have a First Scretary of its own.

Mr. Dewar: rose—

Mr. Rifkind: I give way to the prospective First Secretary.

Mr. Dewar: I am delighted to have the right hon and learned Gentleman's good wishes for my future career, but I fear they will do me no good.
I am puzzled by the right hon. and learned Gentleman's argument. I understood that devolution was a disaster, a catastrophe — the dismemberment of the United Kingdom, according to the Conservative party. We are now being told that it is all minor cosmetic tinkering and dry administrative adjustment, not worth a candle. Which is the right hon. and learned Gentleman's position? He is making himself more ridiculous by the minute.

Mr. Rifkind: The hon. Gentleman's proposals have a fundamental significance, but I am puzzled and curious as to why, for the past 10 years, he and his colleagues have constantly shied away from the terminology which is


usually associated with campaigns for home rule, federalism or constitutional change in almost every other part of the world. There is a significance, and the hon. Gentleman is well aware of that.

Mr. Dewar: I am puzzled. If someone strays into the kind of language that the right hon. and learned Gentleman is accusing us of eschewing, that is immediately pounced on as an example of the central irresponsibility of the devolution scheme and as evidence that it is not really a scheme to reform the government of the United Kingdom, but something totally different. The right hon. and learned Gentleman is now complaining that we are being too careful, saying what we mean, and arguing the case in which we believe— that the government of the United Kingdom can be strengthened by giving a greater say to Scots over their own domestic affairs. I do not see why we should be pilloried for doing, precisely and accurately, what we claim to be doing.

Mr. Rifkind: That is clearly a matter of dispute between us. There is one major way in which the Opposition's presentation is fundamentally different from what we had 10 years ago, and that is its proposal for a tax-raising power. One must ask on what basis such a proposition is put forward by the Opposition. Some years ago the hon. Member for Livingston (Mr. Cook), now a member of the Shadow Cabinet, said:
Any power to raise revenue in Scotland would create a tax unique to Scotland, which therefore would be politically unacceptable".—[Official Report, 14 November 1977; Vol. 939, c. 161.]
Why is that which was politically unacceptable some years ago now a fundamental element in the Labour party's policy?
The hon. Member for Garscadden says that that is not unique to Scotland. He cannot deny that if that proposal were used to vary upwards the level of taxation in Scotland, it would mean a level of direct taxation which did not apply to any other part of the United Kingdom. The Opposition have spent many hours criticising the Government for the fact that we are to introduce a community charge in Scotland 12 months earlier than in the rest of the United Kingdom. Yet here the Opposition are committing themselves to a higher level of taxation in Scotland, not just in the short term, not just for a number of years, but for the indefinite future.
If the hon. Gentleman says that this is a power to levy tax downwards as well as upwards, I am well aware of that fact. But as the whole tenor of the Opposition's case over the last nine years has been that the Government are not spending enough resources in Scotland, is he seriously asking us to assume that, if the Labour party were in control of such an assembly, there would be the slightest possibility of reducing the tax burden on the Scottish people?
The hon. Gentleman can give me a theoretical answer. He can pretend that that is a matter for the Scottish assembly to decide. But he knows perfectly well that if one of the purposes of such an assembly is to achieve a more generous provision of public services in Scotland, that can only mean that the people of Scotland will be burdened by a higher level of taxation than any other part of the United Kingdom.

Mr. Dewar: Income tax is not a unique tax. It is levied in other parts of the United Kingdom, as no doubt the right hon. and learned Gentleman is aware. I give him that much credit. Is he trying to argue that if one has a form of taxation, it is constitutionally obnoxious and wholly impractical to have different rates in different parts of the country? If so, presumably he is against all forms of variation in, say, rating or poll tax levels when the time comes.
The point of the scheme is that it allows a variation of the revenue of the assembly, for which the assembly will be answerable at the ballot box. But it also preserves the take of the United Kingdom Treasury at national taxation rates. I see nothing offensive or essentially impractical in that and it gives the kind of flexibility that Scotland would clearly want. The Government talk about choice. Why, within the framework of the United Kingdom, do they deny choice to Scotland?

Mr. Rifkind: I did not suggest that there is anything constitutionally improper in one part of the United Kingdom being burdened by a higher level of taxation than other parts if such a political structure were created. I suggested that that would be fundamentally against the interests of jobs, employment and industry in Scotland.
The hon. Gentleman will have to address himself to another matter. In an exchange a few moments ago arising out of an intervention by the right hon. Member for Glasgow, Govan (Mr. Millan), the hon. Member for Garscadden confirmed that his proposals would not involve any additional taxation on industry or commerce. We have to ask: why not? We know that the Labour party believes that an assembly should have industrial powers, control of the Scottish Development Agency, the Highlands and Islands Development Board and section 7 grants to industry. Therefore, if industry is to benefit from the expenditure of an assembly, what curious reasoning has led the hon. Gentleman to conclude that any additional taxation that the assembly might levy should not include business and commerce?
We know perfectly well what the real explanation is. It is that Labour Members are excessively sensitive to the argument that heavier taxation will be a burden on the Scottish economy. They are hoping to convince people that, because that heavier taxation would be imposed only on individuals, not on business, such fears are unjustified. The hon. Gentleman knows that that is not the view of Scottish business or Scottish industry. He knows that the unanimous view of those who run Scottish industry is that the Opposition's proposal would be a grievous burden—[Interruption.] It is for all practical purposes unanimous.
Furthermore, if the hon. Gentleman ever had my job, and if one of his future responsibilities was to encourage new investment in Scotland, the idea that companies such as Ford would be contemplating Dundee, that Compac would be going to Renfrewshire, that Caledonian Paper would be going to Irvine, if they knew that their employees in those locations wold have imposed upon them a higher level of taxation than if they went into development areas elsewhere in the United Kingdom—[Interruption.]
The hon. Member for Garscadden does not understand this point. There are development areas throughout the United Kingdom. If the hon. Gentleman ever ran a company and was contemplating which development area to go to, would he take his company and his investment to that one part of the kingdom where his management


employees and the rest of his employees — the whole work force — were subject to higher levels of direct taxation than in other development areas in England or Wales? If he seriously believes that that would not be a major problem, he is living in a world that bears no relationship to the real problems of industry. There is evidence for what I have said; all the spokesmen for Scottish industry have said so—[Interruption.] If hon. Members refuse to accept the evidence of those who work in industry, that shows why industry has so little confidence in their views.

Mr. Fairbairn: I am sure my right hon. and learned Friend is coming to the serious financial disasters that would result from the Scotland Act. Section 2(2) would give power to the Scottish assembly to
amend or repeal a provision made by or under an Act of Parliament.
If that is not a recipe for constitutional warfare, what is?

Mr. Rifkind: My hon. and learned Friend is correct. The Bill contains some open-ended powers which might indeed have the effect that he suggests.
One of the main arguments that the Opposition have used on various occasions is that if an assembly had existed over the past eight or nine years, many of the major problems that have affected Scottish industry would not have occurred.

Mr. John Maxton: No.

Mr. Rifkind: The hon. Gentleman says that that would not have been the case.

Mr. Maxton: I said that we had never argued that.

Mr. Rifkind: Then I must assume that the hon. Gentleman takes the view that an assembly would have no significance for the major industrial requirements of Scotland.

Mr. Deputy Speaker (Mr. Harold Walker): Order. The Secretary of State should not debate with hon. Members who are intervening from a sedentary position.

Mr. Rifkind: I am happy to accept your advice on these matters, Mr. Deputy Speaker.
If anyone is of the view that an assembly would somehow be relevant to helping the level of employment in Scotland, or to Scotland's industrial requirements, I would advise him or her to consult the paper on devolution published by the Labour party two or three years ago. It said:
The economic problems of Scotland are very similar to those of Merseyside, the North, and, indeed, the West Midlands. They must be dealt with in a national context, and therefore, in terms of broad UK strategy, are best tackled by the United Kingdom Parliament.
I am glad that there is happy agreement between the two sides of the House—certainly between the Labour party and the Conservative party — that Scotland's industrial and employment requirements will be of little relevance to the work of an assembly, other than that the additional powers of taxation will add to Scotland's unemployment and distract from the investment needs of our country.
The hon. Member for Garscadden rightly prophesied that we would refer to the fundamental unresolved issues, with which the Labour party has never been prepared to come to terms. Here I refer to the question how, if an assembly were created, Scottish Members would continue to have a significant role to play.

Mr. Dewar: What does the right hon. and learned Gentleman think?

Mr. Rifkind: I shall come to my own views, if the hon. Gentleman will be patient. At present I wish to refer to the views of an English Labour Member, the hon. Member for Hartlepool (Mr. Leadbitter) who, in 1977, said:
If Scottish Members of the Labour Party think that for one moment I, as an English Member of Parliament shall tolerate their coming here and determining what happens in my constituency when I can say nothing about Scotland, they have another think coming." —[Official Report, 14 November 1977; Vol. 939, c. 182.]
That is not only the view of Conservative Members from south of the border; it is the view of a colleague of Labour Members. It is a matter to which they have blindly, in an extraordinary fashion, refused to address themselves.

Mr. William McKelvey: It would also be fair to the right hon. and learned Gentleman and the House to echo what I once told the House — that we do not seek to impose or to foist Scottish legislation upon our English counterparts. We do not seek to force the Scottish education or tax system on England. But we are having to suffer English legislation being foisted on the people of Scotland, and they do riot want it.

Mr. Rifkind: What the hon. Gentleman does not appreciate is that what he would be foisting on the people of England is a Labour Government that they had not voted for. That is exactly what happened in 1964 and October 1974, when the majority of people in England returned a clear majority of Conservative Members, but still had to live with a Labour Government. I do not recollect Labour Members saying that that was a grave embarrassment to them. I do not remember the hon. Member for Garscadden or other Labour Members, on the Front Bench or on the Back Benches, saying, "Clearly, we must apply our Labour policies only in Scotland and Wales, because England did not vote for them." I do not recollect the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), saying either in 1964 or in 1974, "The Labour Government do not have a mandate for their policies in England, so we shall not nationalise any industry in England; we shall nationalise only those in Scotland and Wales, because they are the only parts of the kingdom in which we received a mandate."
Suddenly there is silence on the Opposition Benches. Can Opposition Members explain why what is sauce for the goose is not sauce for the gander? I shall happily give way to anyone who can explain why a Labour Government, not elected in England, were entitled to govern on a national United Kingdom basis, while a Conservative Government are not entitled to the same privilege. I shall happily give way to any hon. Member who would like to deal with this matter.

Mr. Bill Walker: rose—

Mr. Rifkind: I know that my hon. Friend is anxious to help, and that Opposition hon. Members are anxious for me to give way to him, but on this occasion I would rather give way to an Opposition Member, because we are dealing with a fundamental issue. The deafening silence that has suddenly descended on the Opposition Benches speaks louder than words.

Mr. James Wallace: Does the Secretary of State accept that there is a world of difference,


a deep qualitive difference, between the situation now and the situation in 1964 or 1974, when indeed there was a Conservative majority in England, but Labour seats in Scotland and Wales gave Labour a majority? After the last election the Conservative party in Scotland had only 10 out of 72 seats. If in England the Labour party had been unable to secure more than one seventh of the seats, there would never have been a Labour Government. That qualitive difference is fundamental here. The Conservative party in Scotland has no mandate, and it is no use pretending that it has.

Mr. Rifkind: If that is supposed to be a statement of principle, it is an extraordinary attempt. I appreciate that the hon. Gentleman is doing his best, but he knows perfectly well that the principle that one has a mandate only when a majority of hon. Members elected from a particular territory are of the party to which one belongs is entirely invalid.

Mr. Bill Walker: Will my right hon. and learned Friend ask Opposition Members why it was in order for a Labour Government, without a majority in England, to abolish grammar schools — something that the English cared very deeply about — using the strength of their votes from Scotland, which was not affected, and of their Welsh votes?

Mr. Rifkind: I am delighted that I gave way to my hon. Friend, because he has given a very relevant example, which Opposition Members will not and cannot seek to justify.

Mr. John McAllion: Will the Secretary of State concede that he is trying to confuse the debate and take it off at a tangent? No one on the Opposition Benches, apart from nationalist Members, is challenging the mandate that the Government received in the June election to rule as the Government of the United Kingdom. What we are telling the Government is this: "If you are to be a reasonable, realistic and caring Government of the United Kingdom, you will take heed of the views of the Scottish people within the United Kingdom".
The Scottish people have clearly expressed their view, which is that they want a form of devolution in Scotland. The Government — as the Government of the United Kingdom, although they have little support in Scotland —should be conceding that to the people of Scotland, if they wish to keep them within the United Kingdom.

Mr. Rifkind: That is an interesting point, but it is in no way relevant to the position on which I had hoped the hon. Gentleman would comment.

Mr. Norman Buchan: Would the Secretary of State not think it equally atrocious if the intervention of the Prime Minister today were to secure the return of selective independent grammar schools in Paisley when they have been rejected by the electorate in Scotland?

Mr. Rifkind: Nothing that has been said today will have that effect. When there is a proposal to close a school, which is the choice of parents and which is full, that proposal will require the consent of the Secretary of State. Why the hon. Gentleman should be so opposed to parental wishes being taken into account I find it difficult to understand.

Mr. Alistair Darling: rose—

Mr. Rifkind: If the hon. Gentleman wishes to intervene on a matter that is relevant to the debate, I shall happily give way. That is what is required, I think, by the rules of the House.

Mr. Darling: It is on devolution. The Secretary of State asked about the justification for hon. Members from different parts of the country voting on legislation that will affect parts of England and Scotland. Surely the point of devolution is that it gives expression to the fact that in Scotland the dominant wishes of the electorate are different from those in other parts of the country; devolution would allow those differences to flourish within the whole. It is a question not of a mandate but of allowing differences to be expressed within the whole United Kingdom.
The Secretary of State might care to address his attention to another point. Does he consider that the scrutiny that the House can give him and his colleagues for one hour every five weeks is adequate when in a Scottish assembly scrutiny could be carried out daily?

Mr. Rifkind: The objective is to ensure that those who believe in the Union and in the United Kingdom support a constitutional structure that provides a long-term future for all the territories of the United Kingdom. A system of reform which proposes a fundamental constitutional change for one part of the United Kingdom but no change for the other parts is inherently unstable.

Mr. Maxton: I have been listening to the argument that the Secretary of State is putting forward. First, I do not understand it because there is no English Department of State. We have the Scottish Office, the Northern Ireland Office, the Welsh Office and United Kingdom Departments. There is no English Department. Secondly, the pure logic of his argument is the abolition of the office that he holds and the integration of Scotland fully within the United Kingdom. The Secretary of State cannot argue for a separate Scottish Administration without accepting that there has to be some form of democratic control over it.

Mr. Rifkind: I accept that we cannot argue for a separate Scottish Administration on that basis.

Mr. Maxton: That is what we have got.

Mr. Rifkind: On the contrary, what we have was introduced by a Conservative Government 100 years ago — a Scottish Office within a unitary system of government. The hon. Gentleman is trying to reverse that process.
I have noted over the past few months a very engaging interest in my previous speeches. There have been so many references to them, and such is my curiosity about the interest of the Opposition, that I thought it was about time that I re-read what I said 10 years ago. In 1977, the time that the hon. Member for Garscadden was talking about, I find that in The Guardian, of all newspapers, I wrote:
Few doubt that the Government's present Bill is unworkable and that the mood of the people of Scotland may now become reconciled to our present unitary system and single British Parliament. We could do far worse than our present institutions, but those who wish to preserve the Union must look to other solutions if the need becomes imperative. The answer will not lie in appeasement or in piecemeal constitutional changes for one or other part of the kingdom. It will require Parliament to provide a British answer to what would have become a British problem.


In 1978, in an article that I wrote in The Times, I referred to
the fundamental defect in the Government's proposals; namely, that Scottish MPs will also be able to vote on purely English domestic issues, while their English colleagues will have lost the corresponding right to influence Scottish legislation. That is a defect that can, probably, only be resolved by either creating a federal United Kingdom or by dropping devolution altogether.
I am amazed by my consistency over the years.

Mr. George Robertson: Many of the arguments that the Secretary of State is rehearsing now are arguments that I remember hearing when I came into the House in 1978. What we are all agog to know—and I hope the Secretary of State will confide in us — is whether he voted yes or no for the Scotland Act 1978 in the referendum in 1979.

Mr. Rifkind: If the hon. Gentleman had been here for the last devolution debate he would have heard two things: first, that I voted for the 40 per cent. rule and, secondly — [HON. MEMBERS: "Why?"] Because I believed that devolution could only be justified if there was an irrestible demand by the people of Scotland. Secondly, I indicated the day after the referendum that, as that referendum had shown that there was no irresistible demand—[Interruption.] I voted yes; it is well known that I voted yes. I have never made any secret of that fact. I indicated then, as I indicate now, that only if there was an irresistible demand was that kind of fundamentally unsound constitutional change in the interests of the United Kingdom.
We saw then and have seen since that the interest in devolution in Scotland is largely concentrated on the Opposition Benches. Even among the Opposition there are three schools of thought: those who wish for separatism, those who yearn for a federal solution and those who are trying to avoid the consequences of their own philosophy and are seeking to achieve a devolved system within a unitary structure.
The proposal that the hon. Member for Garscadden put before the House would involve a higher level of taxation on the people of Scotland. It would be contrary to the interests of industry and jobs in Scotland. It would be contrary to the interests and well-being of the United Kingdom. On that basis, and because of other propositions that have been put to the House, I have no doubt that the motion should be summarily rejected by the House when it votes tonight.

Mr. Buchan: On a point of order, Mr. Deputy Speaker. This is a grave matter affecting the operation and the privilege of the House. I arrived here within the last half hour to be told by the press about a decision referred to in documents, which I saw later, which had been given to the various Front Benches this afternoon. The documents contain a letter which had been sent to the headmaster of a grammar school in my constituency informing him, before the House was informed, that the Government propose to introduce regulations which would have the effect of saving schools such as his.
This is a crucially important set of regulations which should be considered by the House. Although the letter was sent to one headmaster—

Mr. Deputy Speaker: Order. I think the hon. Gentleman is raising a matter of privilege, is he not? There

is an established procedure which would require the hon. Gentleman to write to Mr. Speaker on the subject. I suggest that he adopts that course of action.

Mr. Buchan: May I have further clarification Mr. Deputy Speaker? As I understand it, the information was given first to the headmaster of a school in Scotland before being given to the House. No one in the House has been informed, officially or otherwise, of the regulations. I may have chosen the wrong procedure. I am very angry, which is perhaps why I have chosen this procedure. You may advise me, Mr. Deputy Speaker, how best to proceed and whether it should not be followed up as a point of order.

Mr. Deputy Speaker: The question of a Minister informing people outside the House of matters which the House feels it should be informed of first has been commented on by Mr. Speaker in the past. It is not a matter on which I can rule now. If the hon. Gentleman has put the point in the context of the privilege of the House, the procedure would require him to write to Mr. Speaker. That is the best advice I can offer him.

Mr. Rifkind: Further to that point of order, Mr. Deputy Speaker. I understand that the matters to which the hon. Gentleman referred were announced in a written reply at 3.30 pm today.

Mr. Dewar: This matter is of grave importance, not just in terms of the fate of the schools concerned,[Interruption.] The Secretary of State groans, but he has done a remarkable thing. It appears to be done by the Prime Minister from on high. The balance between ministerial power and local government will be altered. It is legislation for a special case.

Mr. Deputy Speaker: Order. The hon. Gentleman must raise matters on which the Chair can rule. The Chair cannot rule on such matters.

Mr. Dewar: I shall be brief. The fact that this incident occurred today was possibly not a coincidence, given the business that we are discussing. The least that the Secretary of State can promise is a full statement in the House tomorrow. We are changing a system in a fundamental way and many hon. Members will want to criticise that change.

Mr. Deputy Speaker: No doubt the Secretary of State will have regard to what has been said, but the Chair cannot rule on the matters raised by the hon. Gentleman. The best advice that I can offer is that which I offered the hon. Member for Paisley, South (Mr. Buchan).

Mr. Archy Kirkwood: On a point of order, Mr. Deputy Speaker. It may be for the benefit of the House to know that regulations and a prayer were tabled this morning in the Table Office. My colleagues and I have already prayed against the regulations and I hope that we shall have an opportunity for a debate on the basis of that prayer. I hope that that will help the House to proceed with tonight's business.

Mr. Deputy Speaker: The hon. Gentleman knows that that is not a matter for me. It is a matter for the Leader of the House. I remind the House that many hon. Members wish to take part in the debate.

Mr. Michael J. Martin: On several occasions I have tried to raise with the Secretary


of State for Scotland the issue of school closures, which my hon. Friend the Member for Paisley, South (Mr. Buchan) has also raised.

Mr. Deputy Speaker: We cannot start discussing the procedure for dealing with school closures. I was asked a specific question, and I hope that I have helped the hon. Member for Paisley, South (Mr. Buchan). The House should now move on.

Mr. Dick Douglas: I do not intend to go through the rather arid country of the Secretary of State's speeches, but I shall comment on some of the points that he has raised.
I concede that this is the United Kingdom Parliament, for which we all stood in June 1987. I readily concede that that is a truism and that the only ways to show disapproval of that result, and therefore not to represent one's constituents, are to be disruptive and to get oneself constantly expelled, to withdraw, like some Northern Ireland Members, or, indeed, not to take one's seat at all.
I concede the Secretary of State's point that devolution is not a prime election issue. No single political issue of this nature dominated the Scottish electoral scene in June 1987. The nature and approach of the Thatcher Government dominated the political scene. No one would dispute that. The Scottish people showed an almost universal distaste for the style of that Government.
Most Scottish Members are here because the Prime Minister's personality found no favourable response among our constituents. She came to Fife during the campaign and her visit was shrouded in secrecy, not particularly for security reasons, but because the opposition was such that she would have had a rough ride from the general public.
Of course, Conservative Members march to a different drum. They believe that, because they have a United Kingdom mandate, Scotland must be given the shock treatment of Thatcherite policy. I do not think that I am misinterpreting the position. They believe that we will eventually see that this is good for us and that the Scottish electorate have been terribly mistaken in rejecting Thatcherite policy in successive general elections.
This is a gamble on the part of Scottish Tories. I have little objection to them gambling with their own future, but today we are discussing the future government of Scotland and the future of our country. What is before us today is not merely a piece of paper with 48 clauses and five schedules. That might be easily dismissed and we might be willing to listen to disputation on it clause by clause, and line by line. What is before us today—I wish that the Secretary of State would rise to his office—is the democratic structure of Scotland which will fit the requirements not just for the 1980s and 1990s, but for the years after 2000.
I give the Prime Minister credit. She, perhaps more than any of our other political leaders, recognises the imperatives of science and technology. Science and technology in modern society have enabled individuals to adopt a self-sufficient, self-reliant approach. Like most hon. Members, I shudder at the amount of time that I spend isolated in a steel box, a car, on my own, going to and from my constituency. I shudder at the amount of

time—when we get time—that we spend at home in small family units, watching television. The growth of small-scale businesses which do not necessarily feel remote from markets and information, bears testimony to advances in science and technology.
On the other hand, the revolution of science and technology, particularly in information technology, has encouraged the view that society can be centralised. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) demonstrated a flaw in the Secretary of State's argument. If we took the Secretary of State's argument to its logical conclusion, we would wrap up the Scottish Office. We would wrap up a separate Secretary of State for Scotland. That may be the Government's design. Perhaps that is what the Tories are moving towards. Perhaps their desire for a wholly centralised society will eventually come about, because they give the impression that they want to eliminate all sources of democratic resistance to them, whether in local government or other spheres.
I put this point sincerely to the Minister of State who will reply to the debate. If the constitution stands that now seems to be developing under the Government, are there any hopes for decentralised areas of democratic power within the United Kingdom? Do they have any plans for constitutional developments which will give voice to the aspirations, desires and outlooks which go against those of Whitehall and Westminster?

Mr. Edward Leigh: No one doubts the hon. Gentleman's sincerity, but I put one small difficulty to him. If he argues that a majority will for devolution in a certain part of the United Kingdom should be met by central Government, how can he deny that will for devolution in another part of the United Kingdom— Northern Ireland? Or is he prepared to grant the wishes of those people? Is there not a certain difficulty?

Mr. Douglas: I recognise that the Northern Ireland situation is extremely delicate, especially for the Labour party. I do not want to be tangential or to avoid the point. We make claims for Scotland because Labour party members stood for election there. There is a great weakness in our advocacy of certain policies in Northern Ireland, because the Labour party does not participate in Northern Ireland elections. Some may say that Northern Ireland must remain part of the United Kingdom unless and until the people of Northern Ireland change that. That is the constitutional view. I claim that the people of Northern Ireland are entitled to a flexible view of how they would democratically control themselves. This is a reflection not just on the Labour party but on the whole House. Because of the strains of history and the delicate position, we have not been able to deal with this matter. I recognise the difficulty.
The centralised approach which the Tories adopt is damaging to the unity of the United Kingdom because it is unlikely to meet the important social aspirations of people in Scotland. It may suit Conservative Members because it facilitates the view that Whitehall, Westminster or St. Andrew's house temporarily knows best, but in a society of 55 million it does not take cognisance of a sense of identification or loyalty among human beings.
The logic of the approach of the Secretary of State is to do away with the Scottish Office and run everything from Whitehall. I submit that modern science and technology could assist them. There is another approach,


which claims that we have the resources to make government more responsible and more responsive to people's needs. I shall illustrate this by referring to taxation. Most of the arguments of the Secretary of State on taxation in a modern context fall down, especially his addiction to a poll tax. The poll tax will prove impossible, but not because there is no technical ability. I do not think that the right hon. and learned Gentleman would have embarked upon such a device had we not had our existing computer facilities.
I shall illustrate my point by referring to some taxation provisions in the Scotland Bill. The right hon. Member for Old Bexley and Sidcup referred during the debate on English and Welsh poll tax legislation to a local income tax. He referred to the practicability of collecting income tax on a local basis because modern computers could be programmed for such a purpose. Modern technology gives us these tools, and will increasingly do so, to make variations in our constitutional and political practices which would have been difficult, if not impossible, to make before.
Surely we cannot think that these devices will be used only for the Government's highly centralised purposes. Surely, as Socialists, we must believe that science and technology can be used to enhance human freedom. That is what we are in the business for. Will the Government say that this constitutional edifice epitomises all that is good in human freedom and that we shall rest there until kingdom come? I do not suggest that we are putting forward a perfect device, but I argue that it has a greater thrust in terms of meeting individual aspirations, especially those of the Scottish people. We are not merely voting for a Bill. We are voting on the direction that the nation of Scotland will take in the last decades of the 20th century and into the 21st.
The Secretary of State says, "No change." We say that the imperatives are to change the forms and substance of government to make them more responsive to the needs and wishes of the Scottish people. Those who share that wish and aspiration will vote for us. The people of Scotland will make up their minds in a future election in relation to their responsibilities.

Sir Hector Monro: It is always interesting to follow the hon. Member for Dunfermline, West (Mr. Douglas) and to listen to his views. To a degree I subscribe to them — a party's standing depends very much on hearts, minds, style and presentation and, equally important, on results. At the end of this Parliament in four or five years, the Government will be judged on that. The people of Scotland will have seen what I am determined to see—for example, unemployment continuing to fall as it has over the past year.
Tonight we tend to say to ourselves, "Here we go again. When will we stop debating devolution?" Is the Labour party trying to show its virility week by week, month by month? The Labour party was piqued that it was trumped by the Liberal party in November and that Labour's deployment of a Second Reading debate on its Scotland Bill was prejudged and pre-debated by the House in November.
This debate highlights Labour's ineffectiveness. No wonder the reputation of the "feeble 50" is developing week by week. Those hon. Members have shaped up particularly poorly during questions and in debates on

orders and statutory instruments and on the Select Committee issue. The hon. Member for Falkirk, West (Mr. Canavan) has messed up our procedures in the Chamber and in Standing Committees, which shows that the Labour party is hardly fit to govern or fit to bring in an assembly with any hope of success. Labour Members must learn more about this place and parliamentary democracy before trying to take it apart with mayhem and to break up the unity of the United Kingdom.
We all appreciate the fact that Labour's stock is plummeting and that the heady words of June had evaporated by mid-winter. I was interested to read the leader in The Scotsman—no friend of the Conservative party—on 22 January. It said:
Mr. Dewar" —
who has now given his life story to the Sunday Post—
has to accept that his 50-strong phalanx has suffered a shaky baptism … he must … persuade all of his colleagues to trim their ambitions to suit the constitutional reality. Unless he is successful in that, Scotland's Labour MPs will appear to be a rag-taggle, undisciplined crew for which 'feeble' would be too kind a description.
[Interruption.] That is The Scotsman, not me. This shows that one of the newspapers of Scotland has already taken a different approach compared with recent years.

Mr. Maxton: Since the Conservative party lost 11 seats and the Labour party gained nine in Scotland in the general election and since the last opinion poll in the Glasgow Herald showed that we are seven points up in Scotland on our remarkable election results in June 1987, could the hon. Gentleman explain why he considers that the Labour party is doing so badly in Scotland?

Sir Hector Monro: I am explaining to the House something that is well known, that the performances of the Labour party in the House has been beyond description and that it is not fit to bring in a Bill for Second Reading. In a way, that is also a con on the Scottish public, because Labour Members know perfectly well that, whatever happens, they are in no position to obtain a Second Reading for this Bill and so are certainly not fit to guide through this House legislation that might have such an impact on Scotland.
The Opposition spokesman on Scotland, the hon. Member for Glasgow, Garscadden (Mr. Dewar) declined to go into any detail on the cost of what the Opposition propose. They have spent the past year drumming up tremendous opposition to the community charge, enlisting the support of the Convention of Scottish Local Authorities, at great expense to the ratepayers, and saying that this is a unique tax; yet here they are in their Scotland Bill inevitably moving towards a far higher tax on the people of Scotland because of the expenditure on the proposed assembly.
No one would deny that over the past nine years the Labour party has shouted the odds from the rooftops. They have declared that we must spend, spend, spend to buy ourselves out of economic trouble — never mind inflation, never mind the rise in the cost of living. They say that if we just keep on spending, everything will be all right in the end. If that were to be the policy of a Labour Government and a Labour assembly dominated by Strathclyde, heaven help the economy of Scotland and heaven help the people of Scotland who would have to pay the cost of an assembly. It is no use the Labour party trying to avoid this key point in the question whether there should be an assembly.
My right hon. and learned Friend the Secretary of State was absolutely right to highlight in his brilliant speech how important it was to bring home to the people of Scotland that to put through the Scotland Bill as proposed by the Labour party would lead to one of the most expensive operations ever imposed on Scotland.
We know too that we had endless promises last May and June about the future of Scotland under a Labour Government and how they would overcome the problem, again highlighted by my right hon. and learned Friend, of how to be fair to England if there were a Labour Government only because of the number of Scottish Members of Parliament. Again Opposition Members dodged that issue today and sat in deathly silence when my right hon. and learned Friend asked them to explain away this very important point.
In the 1970s, I was one who favoured a form of devolution, and I abstained from voting on the Bill because I felt that there was merit in proceeding in the right direction to give Scotland additional powers through a form of assembly; but subsequent legislation and the subsequent attitude of Opposition Members have shown that my hopes in that regard were quite unfounded.
I have always believed in the possibility, which has become a reality, of a dramatic improvement in the administrative devolution at St. Andrew's house. In passing, I must tell my right hon. and learned Friend how delighted I am to see that he intends to return to old St. Andrew's house. As a junior Minister in 1974, I manned a small rearguard action to the then Secretary of State and asked that we should not move to the awful jungle across the road but should rather stay in that imposing building with its great Scottish Office tradition; and I am very glad that my right hon. and learned Friend is returning to relative peace and quiet, somewhere which the average person can find and where he can park his car in reasonable comfort.
What we should be acknowleding today is how effective the Secretary of State, with his Ministers, has been in obtaining additional resources for Scotland in industry, the Health Service, education, the police and fire servies and every other direction, and in helping local government to spend more money then ever before. The fact that local authorities come here, supported by COSLA, and talk about nothing but cuts is quite irrelevant, because more money than ever is going into services in Scotland due to the good administration of my right hon. and learned Friend and the Government as a whole.
All in all, Opposition Members have not succeeded in making a case that would carry any weight in Scotland. They have dodged the issue of the enormous cost that would be placed on the people of Scotland if an assembly were ever to come about. We must throw out the motion before the House and show the Scottish people that there is a better way forward than that proposed by the Labour party.

Mr. James Wallace: It is always particularly interesting to listen to the hon. Member for Dumfries (Sir H. Monro), especially on such an issue as this. I remember receiving an election address from him in the October 1974 election in which he gave an unequivocal and clear commitment to support a Scottish assembly. I

also noted his wish to have the Secretary of State restored to old St. Andrew's house, a building which he described as imposing. It is an apt word, considering the impositions that the Secretary of State makes on the people of Scotland in his continued exercise of that office.
When the Leader of the House announced the title of this debate last Thursday, there was an audible groan from Government Members who feel that the House—rightly, in my view — is frequently asked to debate the government of Scotland. It is an issue which has been debated here over many years. In moving the Second Reading of the Government of Scotland Bill in 1913, the Liberal member, Mr. Cowan, itemised five or six occasions in the previous 26 years when the issue had been debated in the House. In 1966, my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir. R. Johnston) introduced a Scottish Self-Government Bill, and twice since his election in 1983 a similar Bill has been introduced by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood).

Mr. Salmond: Could the hon. Member tell the House if the 1966 Bill that he referred to contained provision for proportional representation?

Mr. Wallace: I am pretty certain that it did. If the hon. Member speaks later in the debate, I will try to intervene and give him confirmation.
Against that background, although I have many reservations on the Bill which forms the subject matter of this debate, I nevertheless think that it is a welcome contribution to the debate on Scottish home rule and devolution.
It will come as no surprise to hon. Members on the Opposition Front Bench that one of my party's reservations is the absence of a clear commitment to proportional representation. It is perhaps significant that there is no indication which electoral system will be used. I remember campaigning in the referendum debate in 1979 in the south-west of Scotland; I now represent a constituency at the other end of Scotland; both constituencies are rural and are sometimes described as peripheral areas. It has been clear to me that one of people's anxieties about Scottish home rule without proportional representation is that there would be a large single-party majority which would dominate the assembly and which would not be sensitive to the needs and views of those who live in the rural areas of Scotland.

Mr. Maxton: I can understand the debate about proportional representation in respect of the overall balance within a country, but I must tell the hon. Gentleman that single-assembly constituencies, elected in the way that we suggest — which is two assembly constituencies for each present parliamentary constituency —would give a much greater proportion of seats in the assembly to rural areas than would proportional representation. I do not understand why the hon. Gentleman keeps putting the case before us.

Mr. Wallace: I am in favour of an assembly Member for each part of my constituency, but, assuming that constituencies voted consistently and elected two Members of the same party, it would double the imbalance that we presently have with the Labour party. I am not detracting from the considerable electoral success that it enjoyed in June, but it amounted to only 42 per cent. of


the Scottish vote. It gave it a huge preponderance of seats, which, if doubled up, would give it 100 out of 144 seats in a Scottish Parliament.

Mr. Sam Galbraith: The hon. Gentleman is confusing two matters — the geographical distribution of seats and distribution among parties. Proportional representation is distribution among parties, not geographical distribution. Proportional representation will not shift any bias to the rural areas; it will shift it within the political parties. I do not see why that advantages or disadvantages rural areas.

Mr. Wallace: I follow the point that the hon. Gentleman is making, but the Labour party, with one or two exceptions— notably the hon. Member for Western Isles (Mr. Macdonald)—derives most of its membership from the urban areas of Scotland, whereas the other parties derive their membership from the non-urban areas. It is not healthy for our politics to have one party with a predominance of interests in one area. The Conservative party is represented in the rural areas of Scotland, but—perhaps for obvious reasons—is not represented in the urban areas of Scotland. It would benefit the Conservative party, and would be healthy for democracy, if it had a more direct interest in and a closer relationship with the electorate in, for example, Glasgow, which it does not have under the present system.
In a previous debate, the hon. Member for Glasgow, Cathcart (Mr. Maxton) suggested that my right hon. and hon. Friends regarded proportional representation as a higher principle than Devolution. It is not a question of one principle overriding another. We believe that, unless they are taken in tandem, the pro-home rule argument is weakened. Proportional representation has not been put forward by us as a blocking measure but as an enabling measure for a more democratic nation.
Our other reservation relates to the problem of introducing a new tier of government while retaining a two-tier system of local government. It may be that the Labour party has an open mind on this subject. If we were debating this proposal in Committee we would hope for some movement on it from the Labour party.

Mr. Maxton: Perhaps I can clarify the matter for the hon. Gentleman — we are anxious to have as much agreement as possible. It is in the view of the Labour party in Scotland that it would be for a Scottish assembly, given the power, to take decisions about local government and its structure. It has always been my view, and that of many Labour Members, that once there is such an assembly it would move quickly towards single-tier government.

Mr. Wallace: That statement helps to try to win greater consensus for the proposals that we have put forward.
While I agree that the boundaries and powers of local government should be a matter for a Scottish assembly, we have proposed that, at the same time as bringing in a Bill to devolve power to Scotland and create a Scottish Parliament, a commission should be set up whose remit would be to report to that Parliament with new proposals for local government in Scotland to reduce it to a single tier. It is necessary to give an assurance that we are not imposing an extra tier of government that which already exists.

Mr. Malcom Bruce: Are we not anxious to get across the fact that the difficulties faced by the Labour

party in securing the necessary support for the last legislation were partly because of the voting system and partly because people were not prepared to accept an assembly on top of the existing tier of local government? Therefore, those problems must be solved together.

Mr. Wallace: My hon. Friend has articulated our important reservations about this matter. If this were the Second Reading of a Bill, these points would have to be debated in Committee. At this stage, it is better not to give the Government troops an opportunity to say that the Opposition are divided and that there is no consensus in favour of the principle of greater decentralisation. On that basis, we are prepared to support the motion.
It is important to take up some of the arguments that have been advanced, somewhat weakly, by the Government. The Secretary of State thought that he had made a clinching point by saying that he had received only 64 representations on the subject of home rule. There is an old Scottish phrase that says that there is "no use preaching to Ailsa Craig." As we do not expect any response from the Government, there is little point in making any representations.
The Government have said that home rule is a short cut to separatism. The truth is quite the reverse. The longer that the status quo is dammed up and the Scottish desire for self-government frustrated, the greater will be the damburst in a separatist direction.
We have been told that business will desert Scotland. That is not a point that Lord Home advanced in 1979, when he called for greater economic and financial powers for a Scottish Parliament.
The last bastion of Conservative argument raises the banner of fear. It is not in tune with what for centuries has been the native Scottish spirit of enterprise and innovation. There are financial institutions in Edinburgh that all hon. Members would like to see playing a more prominent role. No one has suggested that they are being parochial or inward-looking. What we lack in Scotland is the political focus that would be the catalyst to draw more industry and enterprise.
Mr. Brian Meek, the Tory leader on Lothian regional council, recently said:
Opponents say that firms will go elsewhere if taxes here were different, but I think that is an utterly simplistic argument that can be demolished on a whole range of points.
Why is it always assumed that taxes will be raised? Fiscal regulation could mean reducing the rate of corporation tax. The Government have always advanced the argument that cutting taxation will make the economy more buoyant, but if it were the vote of the Scottish people to raise taxation, to opt for better roads, hospitals, housing and schools, that would be the democratic view of the Scottish people. If money were invested in education, training and better roads or, for example, in my constituency, on better subsidies for transport to and from the islands, it would help industry to become more competitive.
The Tory party in Scotland has advanced the bogus argument that a Scottish assembly would lead to an extra bureaucratic tier. As a description of our proposals, that argument is not accurate. It also ignores the presence of substantial administrative bureaucracy in St. Andrew's house, which is inadequately accountable; at least, it is not properly accountable in the limited time available during Question Time.
It is not many years since we had the Portavadie fiasco. A rather mysterious financial consortium was given £12 million by the Department of Energy to build a workers' village for an oil platform site. The project was approved by the Scottish Office in spite of unfavourable evidence given at a public inquiry. No platform was ever built, and when the Government tried to recoup some of their investment they discovered that they had omitted to secure title to the land on which the village was built.
If we had a Scottish Parliament making Ministers accountable on such matters, I do not believe that that money would have been wasted. There would be savings in public money if the Scottish Office were more accountable.
Responsibility goes with fiscal powers. The block grant alone would surely be a recipe for confrontation. The blame for every school, hospital, trunk road or bypass delayed or not built would be laid at the door of the Westminster Government. Without revenue-raising powers, the financial responsibilities of the assembly could well be diminished.
When the Scotland Bill was receiving its Second Reading 10 years ago this month, my hon. Friend the Member for Inverness, Nairn and Lochaber (Sir R. Johnston) related his experiences when he was a member of the Royal Commission on Local Government in Scotland—the Wheatley commission. He drew attention to a visit to the Faroe Islands, where he had seen a community school, in which the members of the community took great pride and interest. He pointed out that the community had contributed 60 per cent. to the cost, the Faroese Government 20 per cent. and the Danish Government 20 per cent.
By contrast, in my constituency, my hon. Friend had been shown a school that had attracted 90 per cent. Government grant. Local people could not understand why it had been built in the face of a prevailing wind. They could not understand why there was no connecting corridor between the kitchen and the dining area. There were many complaints because it had been the responsibility of the people far away in London, not that of the local people. When the bulk of funding rests on a community or, in this case, the Scottish nation, there will be a more positive attitude to responsibility and price.
We are always being told by the Tory party that the Tory Government were elected to get the state off the backs of the people. In speech after speech, the Secretary of State has said that we must wean Scotland away from the paternalistic society which he claims pervades it. What could be more paternalistic, or maternalistic, than a Government who say, "Trust the people, but do not trust the Scottish people to have their own self-government". They trust the people, but only if they agree with them. That view of trusting the people leaves no room for the maximum choice, variety or diversity or for having a real influence on the decisions that affect the people. The Government's version of trust is the very antithesis of the Liberal view, which is that people should have a choice and be able to decide things for themselves.
We must take up, head-on, the issue of what really poses a threat to the Union. I do not believe that the threat comes from the Scottish National party. It could not have had more favourable political circumstances over recent weeks. My party has not exactly crowned itself with glory,

but the SNP has failed to make any significant political impact, with all the wind blowing in its favour. I do not believe that any threat to the union comes from the proposals in the Labour party's Bill or from the proposals for federalism consistently put by the alliance parties. One might ask whether we would know Canada as it exists today if it had not been for its federal structure. It is unlikely that a province as alienated as Quebec has been at times would have remained part of a unitary structure such as that which we have in this country.
The most serious threat to the union comes from this Tory Government, who not only refuse to respond to the aspirations of the Scottish people for self-government, but do not even accept that these aspirations exist. In the last century, Lord Acton said:
A State which is incompetent to satisfy the different races within it, condemns itself.
The intransigence of the Government on this issue may well prove that to be the case.
I and my party do not wish to see the break-up of the United Kingdom. The ties of family and friendship, the shared triumphs and tragedies of our common history over the past 280 years are sufficiently strong to unite us. However, we are so confident of that unity that we think that it is not only possible but essential that Scotland's nationhood within the United Kingdom is properly recognised.
In the great home rule debate of 1886, it was said:
The passing of many good laws is not enough in cases where the strong permanent instincts of the people, their distinctive marks of character, the situation and history of the country require not only that these laws should be good, but that they should proceed from a congenial and native source and besides being good laws should be their own laws.
Mr. Gladstone's words ring true today. He was ignored then and great calamity followed. We will be in a sorry and dangerous state if his words continue to be ignored today.

Mr. Nicholas Fairbairn: It is a pleasure to follow the hon. Member for Orkney and Shetland (Mr. Wallace) and to hear his discourse on the dangers and threats to the union of the United Kingdom. I would have thought that a little modesty from a Scottish Liberal on the concept of alliances, unions and fragmentation would be in order at the moment. I cannot think of any surgeon on whom I would call less to receive a lecture on that matter than a member of the Liberal party or a member of the Scottish Social Democratic party, if there is one at the moment.

Mr. Galbraith: Brutal.

Mr. Fairbairn: The hon. Gentleman is a distinguished surgeon, and he must have heard me give the anaesthetic before I made that remark.
It is an important political fact that the interest of the Labour party in the concept of what is called devolution and the Scotland Bill is an interest that has arisen entirely as a result of losing three United Kingdom elections. I remember no enthusiasm when my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) made his disastrous declaration of power. I do not remember the Scottish Labour party saying, "Hooray, we are all Heathites now." The plain fact is that it is saying, "If we cannot run SS Great Britain, let us launch a little lifeboat with a unionised crew." Essentially, that is what it is about.
It is nothing to do with principle. It is a new-found faith based on the attitude that if it cannot swim in a sea, it can at least swim in a puddle.
The Labour party has some explaining to do. We come, first, to finance. I do not see how central taxation in a unitary state can be raised differently. The fantasy put forward by the hon. Member for Orkney and Shetland, that taxation in Scotland might be lower than that in England, is unbelievable. The Labour party in Scotland is constantly asking for tax-raising powers, in addition to those of the Treasury. The then Member for West Lothian, now the hon. Member for Linlithgow (Mr. Dalyell) asked a fundamental question, which became known as the "West Lothian question". In a unitary state one cannot have different legislative responsibilities in which those in the large part have no say over those in the small part, but those in the small part can alter the decisions affecting the large part.
I raise an infinitely more fundamental question, which I hope will become known as the "Perth and Kinross question". The Labour party's Bill says in clause 2—all hon. Members should listen to this:
A Scottish Assembly Act may amend or repeal a provision made by or under any Act of Parliament".
That means that without consultation with Parliament, without the leave of Parliament and without the vote of Parliament, Acts may be altered and it has no right to interfere. If we are to have a situation in which a Scottish assembly can interfere with the United Kingdom legislation, such as Finance Acts, there is no answer to the old West Lothian question, the economic question or the constitutional question.

Mr. Galbraith: If the hon. and learned Gentleman reads the Bill further, he will see that that clause starts off by saying:
Subject to sections 3 and 4 of this Act".
Clause 4—or section 4 as it would become—would give the Secretary of State the power to scrutinise such legislation before it is presented to the House if he thinks that it is ultra vires. Therefore, the hon. and learned Gentleman's point is just a red herring, or a blue finnan haddock.

Mr. Fairbairn: It is not. Clause 2 continues:
The validity of any proceedings leading to the enactment of a Scottish Assembly Act shall not be called in question in any legal proceedings … The validity of any Scottish Assembly Act shall not be called into question".
This will be an extra vires assembly. It will constantly be a law unto itself.
Let us be quite clear about the present position of economics and funds in Scotland. At present, of the nine regional councils, two rule and raise money in the name of, or out of the funds of, two thirds of the people of Scotland. That is, Strathclyde region and Lothian region. These two Labour authorities put together are the equivalent in size, measure and political intent of a Labour Scottish assembly. They raise infinitely higher taxes on the unfortunate people of Lothian and Strathclyde than do any of the other seven regions of Scotland.

Mr. George Galloway: That is why they keep getting elected.

Mr. Fairbairn: Exactly. They get elected because they raise money from the people who make the money and spend it on the people who do not make the money. That

is always a recipe for being elected. Any assembly in the hands of the Labour party would increase Scottish taxes, not reduce them.
Let us be absolutely clear about this. The United Kingdom Treasury spends about 25 per cent. more per head on Scotsmen than it does on Englishmen, and nearly double what it spends on Cumbrians or Northumbrians, whether in transport, education, the social services or the Health Service. Opposition Members may not know this, but at the time of the Scotland Bill the Treasury conducted an exercise in which it worked out the relative unfairness of the treatment of the regions of Britain — riot just England, Wales and Scotland, but the north of England, Cumbria, the west, the midlands, the south-west and so on. It concluded that Scotland was being overfed with between £600 million and £1 billion.
The first thing that the Treasury said was, "Right. Pass the Scotland Bill and we will want that money back. If you want to run your own affairs, you can run them, but you will not get British Treasury generosity to an extent that no one else in the country gets it." In Scotland, we now spend £8,000 million. Therefore, the assembly would have to start by raising between £1,000 million and £2,000 million, using its tax-raising powers, just to get Scotland back to where it is now. Thai is the first fundamental flaw in the Opposition's argument.

Dr. Reid: I am deeply moved by the hon. and learned Gentleman's touching concern over the onerous burden of taxation that the assembly might impose on the Scottish people. Given that deeply felt concern, will he confirm that the average family ill Scotland is paying just over £27 a week more in all taxes under this Government than it was paying in 1979? Will he further confirm the figures that I put to Ministers some days ago, which I received from the Library? They show that, in addition to that £27 a week extra, the average family with two adult children will pay an additional £2,000 a year in poll tax within the next lour years. Is it not the case that the hon. and learned Gentleman's crocodile tears over taxation are only a mask to hide the crocodile teeth of the Tories when they get their hands into the pockets of working people?

Mr. Fairbairn: I am glad that the hon. Gentleman intervened, because he has demonstrated another reason for our not having a Scottish assembly. He does not understand anything about economics. If he cares to examine the differences in taxation in Scotland between now and 1979, he will discover that the increase arises because the income of the average Scottish family and the average working wage have gone from the bottom of the table in Great Britain to the top. All that Scottish families are having to pay extra is £27 a week, and that is only because they are infinitely more prosperous than they were.
Opposition Members cannot say that industry abroad will not take account of differences in taxation. It is a sensitive matter to try to persuade someone not to go to Holland, Spain, Portugal, Cyprus, Greece, France, Germany, Devon, the midlands or London, but to come to Scotland. The most important factor of all is cost and the best deal regarding cost. Taxation is taxation on employees, the incoming work force and the company's capital and income. Let it be understood that if Scotland earned a reputation for being the high-tax country—just


as Glasgow wrongly had the reputation of being the criminal city — it would be very difficult to shed, especially if the rumour were true.
The hon. Member for Orkney and Shetland referred to the history of Scotland, which few Opposition Members will have read, I suspect. One does not have to be taught it at school to take the trouble to read it. The fact that historical chance has left the border where it is does not mean that there is a sensible constitutional argument for setting up another Government north of it. If Opposition Members want an example of the folly of that concept, they should look at the facts. Any lawyer in the whole of Europe can practise in a Scottish court, except an Englishman, and any lawyer can practise in an English court, except a Scotsman. That is absurd. The right hon. and learned Member for Monklands, East (Mr. Smith) is not entitled to appear in a court in England, but a Greek solicitor can appear in a sheriff court or in the High Court in Scotland.
That petty division—the idea that we must not allow anything that does not carry the title "Scottish" —demonstrates the fallacy of the argument. It is a specious argument advanced by Opposition Members who feel that if they cannot have a nice little Marxist republican state in Great Britain, they will settle for a wee one up north.

Mr. Henry McLeish: Opposition Members share a profound concern about the quality of government in Scotland. We can ritually exchange views on the matter and watch Conservative Members treat with contempt any considerations of democracy, but the essential question that I want to tackle concerns the quality of government in Scotland. The arguments about that are very important.
At the last general election, Scotland rejected two extremes. On the one hand, it rejected the extreme of Conservatism, offered by a party whose policies were clearly not in tune with the thinking of the Scottish people and which consequently suffered humiliation, from which it has learnt nothing. On the other hand, Scotland rejected another brand of extremism — the extremism of the Scottish National party, whose contribution to the devolution debate was to advocate Scotland's separation from the rest of the United Kingdom. The fact that Scotland made that decision placed on the Labour party a tremendous responsibility constantly to bring before the Government the needs and aspirations of the Scottish people, and this debate provides us with a useful opportunity to do that.
There is unease about the government of Scotland for two specific reasons. First, a tremendous gulf is developing between the governed and the Government. That cannot be healthy in any democracy. Secondly, the Scottish people perceive the Conservatives as anti-Scottish. Conservative Members may laugh at that, as was shown by the contribution of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), who has decided to leave the Chamber, but it is a serious business. It is not a recipe for stability if the Government and the 10 Conservative Members elected to represent the interests of the Scottish people constantly appear to be anti-Scottish. That is a key issue.
I come to the House not as a separatist or a nationalist in the narrow way advocated by the SNP, but as someone who is clearly interested in the integrity of the United Kingdom, in social cohesion and stability, and who passionately believes that those interests could be jeopardised if we do not move towards decentralisation of government and power in this increasingly centralised state.
It is quite obvious that the Government would like to dwell on the matter of taxation. That is ludicrous. They have not even accepted the notion that devolution is of benefit to Scottish people or can help in the cohesion of the United Kingdom and cement its stability.
My main contention is that, at present, we in Scotland are experienceing thoroughly bad government. That provides additional pressure for the Labour party to put forward what it regards as reasonable, modest, moderate measures to give Scottish people a more direct say in matters that affect them.
Bad government could be based on two things. One could be the Government's excesses. They are well documented and understood by Scottish people. There is another serious point. With the centralist Government that we have at present, it is obvious that strains and tensions are beginning to appear in other parts of the United Kingdom. A unitary state can retain cohesion and credibility only if it recognises the distinct features of all parts of the Union, not just the parts that are represented by the Government. To their peril, many people ignore that simple point.
Our case, within the House and within Scotland, has traditionally been about devolved government that would attempt to do four basic things. First, as some of my hon. Friends have mentioned, it would democratise the administration of Scotland. We have widespread administrative devolution; and, indeed, it is certainly a democratic system, so-called. It is useful to make that system accountable to Scottish people.
Secondly, there are separate national identities in education, religion, many aspects of the law, and culture. That fact must be recognised. Thirdly, the people of Scotland, as a separate area, have a different culture and different ways of life that the House will ignore at its peril.
There is a fourth compelling reason why the debate should capture the Government's interest, and even that of English hon. Members. My hon. Friend the Member for Redcar (Miss Mowlam) mentioned decentralised government within the United Kingdom. There need not be the same solution in each part of the kingdom. Nevertheless, the same compelling pressures that are driving Scots towards more power over their own affairs exist in different parts of the country. That provides the link between what has traditionally been a Scottish and Welsh issue, distinct from the main stream of United Kingdom politics. If we absorb that point, it will make the debate more meaningful and should capture the imagination of Conservative Members, although I doubt it.
If they are the accepted conventions upon which we base our campaign, I shall reflect for a moment on the strains and tensions that are now giving added urgency to the issue of devolution and government in Scotland. Again, I shall reflect on what I perceive to be manifest weaknesses in the Government's case. I hope that all Conservative Members represent their party's interests. That is fine. But surely some of them should have some pride in their political craft. When ideas about democracy


and accountability are being discussed in the Chamber, it is unacceptable for contempt to be shown for issues that allowed the country to develop the democratic system that is the pride of many nations.
The first point that I stress relates to legislation. I refer to education, housing, poll tax, local government, regional policy and bus services. If a devolved assembly existed in Scotland, Scottish people would be able to state their views and debate and judge such issues. What do we have? Uniquely unpalatable proposals are put forward by the Government, who take cognisance of nothing that is Scottish. Indeed, if the proposals were not contained in Government legislation, to all intents and purposes they would be regarded as a complete joke. That is offensive to Scottish people. When a Government's legislative programme bears no relation to the consensus that the culture reflects, it is a serious matter for the Government.
My second point relates to policy. We talk about the Health Service. The Minister with responsibility for Scottish health matters, with every power at his disposal, tries to force Scottish health boards to do things that are in the interests of neither the Health Service nor the people whom it is supposed to serve. Why? It is because he is motivated by organisations that care not a jot about the concerns, needs and aspirations of Scottish people. It is an absolute outrage that the Minister can abuse his power and, at the end of the day, is elected by Scottish constituents to represent their interests.
Thirdly, what about the parliamentary dimension? It is a farce for a new Member such as myself to sit here when the Government have about 370 supporters. But the Government cannot find five hon. Members to serve on a Select Committee. What do the Scottish people read from that? The Scottish Grand Committee has not met. During Scottish Question Time, the Government wheel in the Secretary of State's protection gang. If we have time, I shall reflect on the appearance of the hon. Members for Darlington (Mr. Fallon), for Mid-Worcestershire (Mr. Forth) and for Tatton (Mr. Hamilton). I shall quote the kind of distasteful provocation that Conservative Members invite. Today's issue of The Scotsman states:
We want an end to Celtic featherbedding … I think that after steel and coal, British Scotland should be privatised.
Then there is the hon. Member for Mid-Worcestershire, who couches ignorance, stupidity and insensitivity in the one body—a remarkable example of humanity.

Mr. Bill Walker: rose—

Mr. McLeish: No offence is meant to the hon. Member for Tayside, North (Mr. Walker) because he has been ommitted from my comments.
The hon. Member for Mid-Worcestershire stated:
Spending on the health service per capita in Scotland is one-third as high as in England because of smoking, drinking and confectionery. Why should the English subsidise the bad habits of the Scots?
Why do Scottish people tend to be slightly angry?

Mr. Walker: rose—

Mr. McLeish: I shall finish this point and then give way to the hon. Gentleman.
In the so-called mother of Parliaments, the Government will consider major aspects of scrutinising the Executive. What do we find? Because Conservative Members are 400 miles from Scotland and because the

press is nowhere to be found during debates such as this, they say certain things and act in a certain manner, and their accountability is nil.

Mr. Walker: I imagine that the hon. Gentleman was in the House yesterday when a ten-minute Bill dealing exclusively with English and Welsh Health Service facilities was presented. The hon. Gentleman would have noted, as I did, that 17 Scottish Members voted for the Bill. One either accepts this as a unitary Parliament or one does not. If one does not, one cannot make sense of why the 17 hon. Members voted in that way.

Mr. McLeish: I support the United Kingdom, but I can do so only with a measure of sensible devolved opportunities.
In relation to the news coverage in today's issue of The Scotsman, I ask the Minister to disown the offensive comments that were made by the hon. Member for Tayside, North.
The fourth point that I want to stress is the general style of the Government. As I have mentioned, and as my hon. Friends have suggested—my hon. Friend the Member for Bolsover (Mr. Skinner) has described "the goose-stepping tendency"—there is very little between the ears. The Government's distinctive style is to try to take the Scottishness out of anything that is essentially Scottish. That is a peculiar approach to humiliation at the polls. It is peculiar that they should seek to turn their backs on the nation and on the judgment of the people and suggest instead that Scotland is merely an aberration and an appendage of England and of English legislation. That is a highly dangerous strategy for the Government to pursue.
My final point on the bad government of Scotland relates to the profoundly senseless tendencies of the Prime Minister and her Ministers. It seems hypocrisy writ large for the Government to extol the virtues of individual freedom, of setting people free and of the enterprise culture, but, at the same time, constantly to draw to themselves every conceivable power which matters and, as a consequence, merely reinforce the regional dimension, which is fairly unstable at present.
I referred earlier to two forms of extremism. I have dealt with the Conservative Government, but there is another party in Scotland which seeks to comment on the question of government and to put forward different policies to us. Again, I feel confident enough to say that the Scottish National party learnt nothing from the election results. The fourth party in Scotland, increasingly working at the margin of Scottish politics, is so immersed in internal division, leadership policies and personalities, that it still maintains that the best posture for Scotland would be an independent Scotland even though that has been comprehensively rejected in subsequent elections.
I want to highlight and put on the record an act of supreme hypocrisy on the part of that party in relation to the poll tax campaign. We have listened in the Chamber to hon. Members representing that party, and to ex-Members who lead the party in Scotland. They say that we must resist the poll tax and that Scotland's interests would not be served by it. However, at the same time that the leadership, although divided, advocates a policy of resistance, the only council in Scotland that is controlled by the Scottish National party, Angus district council, is willing not only to collect the tax for Tayside but to


advocate that Department of Health and Social Security payments should be deducted at source to make sure that the poor pay.

Mr. Salmond: If the hon. Gentleman looks at the record, he will find that he will have to apologise to Angus district council because it does not advocate any such thing. Is he aware that Angus district council has agreed to collect the poll tax under blackmail from the Labour-controlled Tayside region, which said that unless Angus district collected the tax, Tayside region would send in its own collectors? Will the hon. Gentleman explain that?

Mr. McLeish: Obviously, the record to which I am being referred is confused, as it has been conceded that Angus district council, under pressure from Tayside regional council, which does not have any powers to force a district council to collect, has decided to concede and to collect the tax. Is that the official SNP position or merely the local government dimension?

Mr. Frank Doran: I am grateful to my hon. Friend for giving way. I should like to correct him because his reference to Angus district council was mistaken. It was Grampian regional council, in which the SNP has a share of control. Indeed, it is the only authority in Scotland with which the SNP shares control. That council has refused to have anything to do with the calls and demands being made by the SNP.

Mr. McLeish: We now have it from both sides, from the SNP and my own party, that the position is even worse than I thought. There are groups within groups. Councils that are controlled by the SNP are doing the Government's bidding.
I have tried to suggest that there is no point in hon. Members suggesting that today's debate is not relevant to the Scottish people. There is an important case to be made for devolved government throughout the United Kingdom. We want an assembly in Scotland as a solution to our problems. The solution could be different in the north-east of England.
I am also arguing that the Government's behaviour is leading to bad government in Scotland and to an increasingly unstable situation. I hope that when the Minister replies to the debate he will address himself to those points because they are important, however abstract they may be considered. I shall support the Scotland Bill. If it is rejected, it will be a campaigning weapon for us between now and the next election. It would warn the Conservatives that if they want the death-wish theory of politics to apply at the next election, they should carry on as they are because I am sure that that would be a self-fulfilling prophecy.

Mr. Ian Gow: My right hon. and learned Friend the Secretary of State for Scotland told the House this afternoon that in the referendum following the passing of the Scotland Act 1978, he had voted in favour of the proposed assembly in Edinburgh. I must make a similar confession to the House about my past misdeeds. I voted against the Scotland and Wales Bill on every occasion that I was able to do so and, indeed, I voted against the Scotland Bill on every occasion that I was able to do so.

If I had had a vote in the referendum—alas, I did not—I should have voted against the proposed assembly in Edinburgh.
This debate is taking place in what is still the United Kingdom Parliament. I hope that Opposition Members will not think it inappropriate for an hon. Member who represents an English constituency to take part, especially one who is an emigré Scot. The debate is on the motion that was moved by the hon. Member for Glasgow, Garscadden (Mr. Dewar) that the proposed Scotland Bill "would strengthen the United Kingdom." I wish to challenge that proposition. In doing so, I regret that the amendment that was moved by my right hon. and learned Friend did not challenge that part of the Opposition motion.
The proposals contained in the Scotland Bill would weaken the unity of the United Kingdom and the Union between England, Wales, Scotland and Northern Ireland. I understand and respect the views which have been put by Opposition Members, and I admired the speech of the hon. Member for Garscadden. However, part of the problem with the United Kingdom in recent years is that we have suffered not from too little government, but from too much. The proposals in the Bill will add one further tier of government, even in Scotland.

Mr. Dennis Canavan: The Bill does not propose the creation of another tier of government. All that it proposes to do is to democratise a tier of government that already exists, namely the Scottish Office, which consists of 10,000 civil servants headed by this rubbishy team of Ministers who, as a group, are not elected by the people of Scotland, and who therefore are not accountable to the people of Scotland.

Mr. Gow: I realise that I should not have given way to the hon. Gentleman—[HON. MEMBERS: "Answer him."] I shall certainly answer him. The proposals in the Scotland Bill provide not only for a Scottish assembly but for a new chief executive. What would happen? At present there are 56 district councils and nine regional councils in Scotland. We already have a Parliament of the United Kingdom, and even the Labour party does not propose to diminish Scotland's representation in the United Kingdom Parliament. However, over and above those three existing tiers there is now—to my regret, we are noticing it with greater frequency—the growing power of the European Parliament, which the hon. Gentleman and I used to be able to describe properly as the European Assembly, although we can no longer do so.
To each of those four elected bodies, to which those who live in Scotland, like those who live in Sussex, have the right to send Members, the Labour party proposes to add a fifth—

Dr. Reid: rose—

Mr. Gow: No. The hon. Member for Falkirk, West (Mr. Canavan) has destroyed the opportunity for Labour Members to make further interventions in my speech. If the hon. Gentleman had made a sensible intervention, I would have given way now. [Interruption.] Labour Members must not rebuke me; they must rebuke their hon. Friend.
The hon. Gentleman's proposal for another assembly for those who, in effect, will be Ministers—my right hon. and learned Friend even suggested that one might be


called the Prime Minister of Scotland—will, as is self-evident, add to government and its cost. It is to that extra cost, and to the disruption and unworkability of the proposal, that the amendment refers. However, there is a further objection to the proposed measure, over and above the ground that it would add to the problems of governing a part of the kingdom that is already over-governed: that we should not start to govern one part of the kingdom even more differently from the way that we govern the rest.
I concede that Scotland is already governed differently, with regional councils instead of county councils, and a different legal system. But the greatest difference in the way that we govern the four countries that make up the United Kingdom is not between the government of Scotland and the rest of the kingdom, but between that of Northern Ireland and the rest of the kingdom. I can tell my right hon. and hon. Friends on the Treasury Bench that there are many marked differences—which are frequently not perceived in the House—between the rights now enjoyed by those who live in Scotland, England and Wales and the rights of those who live in Northern Ireland.
Let me give the House a warning. Because we have chosen to govern Northern Ireland in a way so dramatically different from the way in which we govern the rest of the kingdom, we do not want to fall into the same trap with Scotland. I shall illustrate what I mean. Each of us has the opportunity to move an amendment to proposed legislation that affects our constituents in England, Scotland and Wales. However, the 17 hon. Members who represent constituencies in Northern Ireland have no opportunity to move amendments to legislation that affects their constituencies, because we legislate for Northern Ireland almost exclusively by Order in Council. I believe that my right hon. Friend the Patronage Secretary is sympathetic to the view that it is unreasonable that Members of Parliament representing Northern Ireland constituencies should be free to move amendments to proposed Scottish legislation, but unable to move amendments to legislation exclusively affecting Northern Ireland.
There is another important difference. Broadly speaking, the powers enjoyed by regional councils in Scotland are similar to those enjoyed by county councils in England and Wales. Every one of our constituents—there is, alas, no Northern Ireland Member in the Chamber—has the opportunity to vote for a county or regional council. But, in Northern Ireland alone, there is no possibility for any citizen to vote for either a county or a regional council. In general, the powers enjoyed by district councils in Scotland are similar to those enjoyed in England and Wales; in Northern Ireland, however, there is a dramatic diminution of the powers enjoyed by the 26 district councils in the Province.
The Labour party has a long history of misunderstanding the mood of Scotland. [Laughter.] Mercifully, I have evidence to support that proposition. Nearly 10 years ago, the House gave a Third Reading to the Scotland Bill. [Interruption.] The hon. Member for Walsall, North (Mr. Winnick) has only just arrived in the Chamber, and he would be wise to listen. He might learn something.
When the right hon. Member for Glasgow, Govan (Mr. Millan), then Secretary of State for Scotland, moved the Third Reading of the Scotland Bill on 22 February 1978

—I remember, Mr. Deputy Speaker, that you were in the Chamber then, and you may even have committed his words to memory—he said:
I believe that the debate now is moving out of this House and to the people of Scotland. I believe that when it goes there we shall have their support and the implementation of the Assembly."—[Official Report, 22 February 1978; Vol. 944, c. 1461.]
However, when the provisions of what was once the famous clause 80, insisted upon by the House and endorsed in the other place, were put to the Scottish people—in my view, it was right to ask them whether they wished to be governed differently from the rest of the kingdom—they proved that the then Secretary of State was wrong. The test insisted on by Parliament was not met when the Scottish people voted.
If the then Secretary of State was proved by subsequent events to have misread the mood of the people of Scotland, I assert that it is possible that the present shadow Secretary of State has done the same. That is why I believe that my right hon. and learned Friend was right to move his amendment, and I hope that the House will dismiss the absurd proposal in the new Scotland Bill.

Mr. Frank Doran: The people of Scotland will, I am sure, be grateful to the hon. Member for Eastbourne (Mr. Gow) for giving us that perspective on Scottish politics. It is quite alien, however, to the reality on the ground, which is that 76 per cent. of the Scottish people voted for parties that offered devolution in various shapes as part of their election programmes. I think that the hon. Gentleman's points will be as readily dismissed as was the Tory party last June.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), in introducing the motion, made a strong case, not only for the Labour party's position on devolution, but for the Scotland Bill. It is both practical and well thought out, and will be of considerable value in the improvement of the government, not only of Scotland, but of the United Kingdom. That point needs to be stressed, because there is tension in Scotland.
The Secretary of State was, I accept, right in saying that his postbag was not bulging with demands from the Scottish people for devolution. However, the Scottish people are sophisticated. Their political activity is channelled through the ballot box, and, as I have said, they expressed their view on the issue in the votes that they cast in June 1987 in rejecting the position of the Conservative party—as they will reject it again in May, in the district elections.
The Bill is an important measure. My colleagues have made the case for it and no doubt the serried ranks on the Conservative Benches will jump to attention and vote against the motion and the Bill, because that is what they have been ordered to do. Even those who previously stated a commitment to devolution, such as the Secretary of State for Scotland and the hon. Member for Dumfries (Sir H. Monro) will do as they are told and vote against it. However, they will be voting against a measure that would add considerably to the government of the United Kingdom, and I stress the "United Kingdom".
There is a firm and growing demand for a reversal of policy. Over the past eight years there has been a concentration of power in this House and in Whitehall, and a removal of power from local government across the


country, and from Scotland and the regions in particular. Indeed, there has been a concentration of wealth and power in the south-east. I believe that the demand for a reversal of policy is rising, and this demand must be met if the unity of the United Kingdom is to be preserved.
I am not scaremongering. I am not preaching anything other than orderly opposition, by legal means. That is what the Opposition are doing by the presentation of the Scotland Bill.

Mr. Giles Radice: My hon. Friend is aware that this morning the northern group of Labour Members published a Bill to establish a northern regional assembly. My hon. Friend is also aware that my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) was present to support us. We are present this evening, on behalf of the northern group, to support our Scottish colleagues in their initiative. This is a common move—although perhaps in a rather different form— towards decentralisation. We will unite the United Kingdom through a pluralistic decentralised approach.

Mr. Doran: I agree with my hon. Friend. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has already welcomed the initiative taken by the northern group.
My hon. Friends have referred to the reasons for the Bill, and they have placed it in its constitutional context. All hon. Members, even Conservative Members who oppose the measure, can give examples from their constituencies to show why this measure would be of value to them and their constituencies if it were implemented. I want to give two examples of issues that affect my constituency that have caused me grave concern. I want to explain why I believe that my fears and those of my constituents would be considerably alleviated if there were a Scottish assembly.
My first example relates to the problems facing Aberdeen university. In four years' time the university will celebrate its 500th birthday. During that time it has been a centre of learning in the north-east of Scotland, providing a local and national resource. The university has expanded at a great rate and has become an important institution, playing a vital part in the social and educational life of, and the economic activity in, the northeast of Scotland.
As a result of Government cuts imposed on the University Grants Committee, which were passed on to the university, last year the university struggled for its very survival. It has been through immense traumas while trying to come to terms with these considerable cuts. Its block grant is to be cut by £2·5 million. The net effect is that six departments are threatened with closure and 245 jobs are under threat. Almost 25 per cent. of the academic staff are included in that figure. These cuts will have a severe impact, not just on the university, but on the whole life of the north-east of Scotland, to which the university contributes so much.
Schedule 1 to the Scotland Bill deals with universities. Under this schedule it is proposed to devolve control over the Scottish universities to the Scottish assembly. I cannot believe that a Scottish assembly, sensitive to the needs of Scotland, and particularly sensitive to the needs of the regions, would place Aberdeen university, the university of Dundee or any other Scottish university in that position.

The assembly would be aware of the vital importance of each university and its contribution to the locality. At present the University Grants Committee sits in London and does not take local factors into account. It ignores the wider contribution made by the universities and applies a simple accountant's rule to funding. A Scottish assembly would not allow that to happen.
Although I could pick many examples to express my concern, I have chosen only two. My second example relates to BP's takeover bid for Britoil. Britoil is a very important company in Scotland. It is Scotland's largest company and is a significant employer in my constituency. In the Grampian region it employs 750 people. Its operations and explorations centre is in my constituency. Britoil is the world's largest purely exploration and production oil company, and it is the third largest operator in the North sea. It has been one of the most active drillers and the company most active in exploration in the North sea.
Britoil brings considerable benefits to my constituency and to the whole of Scotland. It plays a very important part in the Scottish and United Kingdom economies.
A total of 1,750 jobs in Scotland depend upon the continuing existence of Britoil. The company has taken a positive approach to its investment policy. Its policy is to maximise the Scottish element in its North sea operations. I have already said that its operations centre is in my constituency. Its headquarters are in Glasgow. All its North sea developments are managed, engineered, procured and, in the main, constructed in Scotland.
There are justifiable fears that all that would change if BP were to take over Britoil. Would the Don, Amethyst and Ettrick field developments continue to be managed and engineered in Scotland if there were a takeover? I have already referred to the drilling activity. The company has participated in 172 of the 713 exploration and appraisal wells drilled in the United Kingdom sector. That makes it the most active company in that respect.
Britoil has a drilling programme for the next two or three years, and British Petroleum has its own programme. I cannot accept that if the companies are merged the plans will remain intact. Exploration work is vital to my constituency and the Grampian region. If there is a merger, there will be a downturn in drilling activity in the North sea.

Mr. Salmond: I agree with everything that the hon. Gentleman has said about the importance of preserving Britoil as Scotland's largest independent company. Does he agree that there is nothing in the Labour party's assembly Bill that would allow a Scottish assembly to take the decision on Scotland's largest company out of the unsafe hands of the Chancellor of the Exchequer and place it with the assembly? Why is that power not in the Bill?

Mr. Doran: I had expected that that point might be raised, and if the hon. Gentleman will allow me to develop my comments I shall answer him in due course. In passing, I must stress that the hon. Gentleman believes in independence. That is quite a separate matter and has no part to play in my description of the Bill.
I was referring to exploration in the North sea. Oil industries in the United Kingdom have just experienced a traumatic year. There has been a considerable downturn since the middle of 1986 because of the fall in oil prices. Exploration activity was affected most. If two of the


largest operators in the North sea, Britoil and BP, merge and there is a consequent reduction in exploration, I am concerned that we will face the prospect of another downturn. That downturn will have been created, not by circumstances outside our control, such as the world price of oil, but by something that we could have prevented—the merger of two companies.
We must consider the jobs in Britoil and BP in Scotland that relate to exploration. BP employs about 3,000 people in Scotland. That excludes those employed in the refineries. However, we must acknowledge the knock-on effect on other jobs. Academic studies have shown that for every four jobs in the oil industry, three are dependent upon the oil industry. If there is any downturn in North sea oil activity as a result of the merger, there will be a considerable impact on jobs.
The merger is preventable. The hon. Member for Banff and Buchan (Mr. Salmond) was right to point out that the Bill does not give the assembly specific powers to deal with such issues. The so-called golden share is not in the hands of the Secretary of State for Scotland, or even in those of Ministers at the Department of Trade and Industry. It is held by the Chancellor of the Exchequer. Therefore, it is a United Kingdom Government activity.
The Scotland Bill contains powers relating to the Industry Act 1980 and to various other Acts, and I cannot believe that a Scottish assembly would sit back and allow the potential impact of such a merger on the Scottish economy to pass idly by. I cannot accept that a Scottish assembly would sit back, as the Chancellor has done, and refuse to do anything more than say that the golden share will be operated, without specifying in what way, or without making it clear to BP that it is wasting its time by buying shares, as that will ultimately be ineffective. BP is calling the Chancellor's bluff. It is buying shares on the stock exchange and continuing with its takeover bid.
The future independence of Britoil, which is crucial to the Scottish economy, is threatened by the merger. The Chancellor sits on his hands and does nothing. A Scottish assembly would not permit that to happen. Powers would be sought and pressure would be applied.
However, we do not have that opportunity, as the government of Scotland is in the hands of the Secretary of State for Scotland, who sits idly by and allows the Chancellor to do nothing, while a serious attack is being made on the Scottish economy.
I have mentioned two specific points to illustrate the effect that the Bill would have on my constituency. I believe that it is an important measure for the constitutional government of Scotland and for the continuing well-being of the constitutional government of the United Kingdom, and I urge the House to accept it in due course.

Mr. Bill Walker: Mr. Speaker —[Interruption.] It is unfortunate that the laird on the Opposition Front Bench, the hon. Member for East Lothian (Mr. Home Robertson) does not like to hear the voice of a real Scot from the Highlands.
The hon. Members for Orkney and Shetland (Mr. Wallace) and for Fife, Central (Mr. McLeish) drew attention to the gulf between the Government and the governed. I shall speak on behalf of my constituents, who feel that they are governed at one level by Dundee, which is a long way from Rannoch. They feel that it is a "them

and us" situation. At district level, they are governed from Perth, which is a long way from Glen Shee. They feel that that, too, is a "them and us" situation.
Then there is the problem of Edinburgh, which is where an assembly would be. Edinburgh often seems at least as far away from north Tayside as London, and often further. It is further away, not in geographical terms but in terms of understanding. It is possible to meet more people in London than in Edinburgh who know what happens on Rannoch moor. That may surprise Opposition Members, but I regularly meet in London people who have great understanding of what happens on grouse moors in my constituency.
Grouse moors are not to be underrated; they provide work for people. I am amused by the fact that hon. Members, and particularly the laird on the Opposition Front Bench must have more direct knowledge of what actually happens on grouse moors than I do, because I have never been shooting on a grouse moor. I accept that the hon. Gentleman, with his antecedents and his background, would know more about it.
When hon. Members talk about a "them" and "us" situation, they must understand that the further one gets away from the centres of administration, the more likely it is that such a situation will exist. People in my constituency in north-east Scotland feel that they have very little affinity with those in the west and central belt of Scotland. Indeed, the last thing that they want is to be governed by the west central belt of Scotland. That is not meant as an anti-Scottish statement. I merely place on record the views and feelings of my constituents.
If one looks at the votes during the referendum about which we have heard so much, one sees that my constituency rejected the Scotland Bill, as did constituencies further north. That was the breakdown in Scotland. The further north people are, the less they want to be part of the Scottish assembly.

Mr. Salmond: The hon. Gentleman correctly voiced the views of his constituents, but why does his majority keep going down?

Mr. Walker: The hon. Gentleman is wrong. My majority has gone down only once, but it has gone up twice.
The hon. Gentleman will be sorry that he intervened. The Scottish National party has to rely on lies and invention. I am speaking about the party, and not naming any hon. Members. The gentleman who opposed me at the general election is never likely to become a Member of the House if he continues to oppose me, because I will have exposed his lies and thrown them back in his face. One of those lies was that we would have nuclear dumping on Shiehallion. He gave us as his authority for that the Sunday Post. However, he forgot to tell the people in the western part of my constituency that he had given the story to the Sunday Post in the first place.
I can substantiate everything I have said, as I have hard evidence to prove it. That gentleman who stood for the Scottish National party, a Mr. Smith, gave the story to the Sunday Post in May. The story alleged that certain areas in Scotland had been determined as suitable for nuclear dumping. In the last 10 days before the election, the SNP published a leaflet saying that the Sunday Post had said that there was to be nuclear dumping in Shiehallion. I kept the leaflet as valuable evidence. The SNP will never be able to use such lies again.

Mr. Andrew Welsh: The Nirex document, "The Way Forward", makes Scotland a prime candidate for the dumping of such nuclear waste. Moreover, a Minister in the hon. Gentleman's own Government said that no location in the United Kingdom was ruled out, and that would include Shiehallion. I look forward to receiving my SNP colleague in the next Parliament.

Mr. Walker: I do not wish to go too far down that road, other than to remind the hon. Gentleman that the Nirex report looks nearer his constituency than mine. That is a splendid reward for any organisation which puts out such scurrilous, libellous and lying leaflets.
The hon. Member for Durham, North (Mr. Radice) said that the Labour party was looking for a pluralistic, decentralised Government. That is reputable. There is only one problem. In order to achieve that through legislation, one must capture a majority in the House. That is always the problem with getting legislation through. However one feels about it, one must capture the majority in the House.
That means that one must convince those hon. Members who represent the 80 per cent., or thereabouts, of United Kingdom taxpayers who live in England that they should vote for something that will improve the government of the United Kingdom. It is because the Labour party has been unable to win the hearts and minds of that 80 per cent. that it has been unable to obtain the kind of legislation to which Scottish Labour Members aspire.
It must be progress for Scottish Labour Members to have the support of some, if not all, of their northern colleagues. I do not know where they all are. They will well know that it was northern Members who torpedoed the previous attempt at legislation. However, they must still win the hearts and minds of those further south if they are to put legislation on the statute book.
I have always been against the proposals that have been brought forward on this subject, because I am a Unionist. I never apologise for being a Unionist. I support this unitary Parliament, because it is in the best interests of the United Kingdom and its people. I have never believed that government could not be improved — everything that man makes can be improved—but I will not support measures that are designed to distort the whole.
That is why I have consistently voted against the legislation that my Government have introduced for Northern Ireland. My hon. Friend the Member for Eastbourne (Mr. Gow) made a telling intervention, and his points should be taken on board. The problems that we face in Northern Ireland today are the results of past attempts to buy off trouble by giving it a special kind of government and treating it differently.
There are inherent dangers in doing that, and one is that a "them and us" situation is created. Today we see clearly, to our cost, how people in Northern Ireland do not see themselves as part of us. It does not matter on which side of the political fence the people are to whom one talks, they feel that they are "us" and we are "them". We in the United Kingdom do not understand and have never understood that, and that is rather sad. I worry deeply about the way in which we handle such matters north of the border.
There is no question in my mind but that there are Labour Members who see their only opportunity of obtaining office in their parliamentary working life as

being in some kind of assembly in Edinburgh. Their policies have more to do with their political aspirations than with the good government of the United Kingdom.
I am also opposed to the Bill because, as the Government's amendment says, an assembly such as it envisages will be disruptive. No one can imagine that that will not be the case when there are extreme differences of view on economic measures and on whether it is better to encourage people by reducing taxes, by giving companies greater opportunities or through privatisation. Of course one would have a disruptive assembly.
In addition, as my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) said, we must have an answer to the West Lothian question. We must also have an answer to what he called the Perth and Kinross question. Both those questions must be answered to the satisfaction not of those Opposition Members who aspire to hold down jobs in the assembly, but to the satisfaction of Members from constituencies in other parts of the United Kingdom. They are the people who have to be convinced. Unless they are, the Bill, or any Bill similarly based, has no hope of getting through the House.

Mr. Galbraith: The hon. and learned Member for Perth and Kinross (Mr. Fairbairn) made a silly point about clause 2(3). If the hon. Gentleman was listening, he would have realised that I answered that. Clause 4 gives the Secretary of State the power to look at legislation and to place an order before the House. That is the answer to that question.

Mr. Walker: The hon. Gentleman has not been in the House long enough to realise that if we had an assembly in Edinburgh — [Interruption.] I am not being patronising. The hon. Gentleman referred to orders being placed before the House and how legislation is put through the House. Let me remind him that the basis of my argument is that for anything to work it must have the support of the majority of hon. Members.
If we have an assembly based on the Bill and the Perth and Kinross question is not answered, and the Secretary of State brings before the House an order which does not have the support of the majority of hon. Members, that will be a recipe for disruption. There is no way in which that can be avoided.
Northern Ireland had no assembly or vehicle for disruption, so its Members of Parliament left this Chamber. They could take only the negative step of departing. Anyone who imagines that an assembly based on the Bill will not be disruptive is living in an unreal world.
Such an assembly is also unworkable because the relationship between the two Parliaments is designed to produce the very conflict that Opposition Members hope their Bill will remove. There will be a conflict of views and opinions on important economic matters. There is no way in which that can be side-stepped. All the gloss and good intentions have no bearing.
If Opposition Members do not think that there are such disruptive people in their party, they should look below the Gangway. The hon. Member for Falkirk, West (Mr. Canavan) does things that I would not do and in a way that I would not do them, but I often admire —[Interruption.] He is now getting worried that I might discomfort him. I admire the fact that he stands up for what he believes in. He does not believe in many of the


things that his party is doing, and I admire his integrity in that respect. However, I do not admire the fact that he will not try to bring about change through the correct system, recognising that we have rules and conventions through which one can get things done.
There is still evidence of the 40 per cent. equation that came about when Labour Members, during the passage of the previous ill-fated Scotland Bill, realised that they could bring about change by using the impoverished rules of the time to make sure that the people of Scotland were given the opportunity to show their wholehearted support. The result was that the legislation did not come to pass.
I felt very sorry for the hon. Member for Aberdeen, South (Mr. Doran), because he realised that whatever one did with the Bill it contained nothing to help him with his arguments about Britoil. From his point of view, that was sad. He had to wriggle out of it, and he did it rather well.
The fact is that the Bill, like so many others dealing with this matter, is flawed. Unless it dealt with the whole United Kingdom on the same basis, unless the whole United Kingdom were governed on the same basis, it would lead to disruption and be unworkable.
More important, the Bill would be costly to implement. I remind Opposition Members that over 80 per cent. of taxpayers live in England. They will be asking, "Why should we pay more in taxes so that the Scots can have a say in our Health Service and our schools?"
The answer given by Scottish National party members is that they would abstain from voting. That is credible only when it is said by members of a minority party. If they were sitting on the Treasury Bench, where Labour Members aspire to sit, they would need the votes of Scottish Members to get legislation through the House. I have already drawn attention to the fact that a Labour Government introduced legislation to abolish grammar schools in England. They did not have the vote of the majority of people in England at the time, and they did not have the majority of hon. Members in England, so the votes were pushed through by the lady who is now president of an obscure party—which has not sorted out what it is going to be or where it is going. It used to be called the Social Democratic party. I do not know what it is called today. In pushing through that legislation, for which she did not have a majority of English hon. Members, she relied—quite properly—on the votes of Scottish and Welsh Labour Members.
The Labour argument is that a Government in a unitary Parliament cannot, or should not, put measures through the House because it relies on votes in the unitary Parliament. That means saying, "We cannot accept the results of the 1987 general election, so we want to change the rules; we want to get into office in Edinburgh so that we can be big fish in a small pond."
I look at Labour Members and realise that daily they get older and daily they see their prospects of ever holding office slipping away. I think the quality of the new intake is much improved. The fellows sitting on the Opposition Front Bench now must be very worried, because all their jobs are on the line. They are all at risk, and I believe it will not be long before we see some of the new intake sitting there. I welcome that, because the quality of their debate thus far has been very good.
If Labour Members continue to follow the false god of trying to find jobs for themselves and their colleagues simply because they had a majority vote in Scotland, they

are mistaken. I find it impossible to support the Scotland Bill, because, as the amendment says, it would have a destabilising effect on the United Kingdom.
If Labour Members were honest, they would realise that there are three options. One is the status quo, with improvements. The second is a federal structure. The hon. Member for Durham, North (Mr. Radice), has talked about a pluralistic, decentralised system. That would be viable only if the whole United Kingdom voted for it and accepted it, and its supporters do not have the hearts and minds either of the voters or of hon. Members. The third option is the one put forward by the Scottish National party. I do not support independence, but at least it is credible; it is a viable option. I have always said so. The fact that I am totally opposed to it in no way makes me fail to recognise that if all the Scots people wished to have independence it would come to pass. But we all know that that is not what the Scots people want.
In its attempt to satisfy its craving for power, and to appease those who voted for it, the Labour party keeps bringing forward non-viable, unworkable, unacceptable Bills, such as the one referred to in the motion. As long as it does so, and as long as it is unable to command the support of the majority of hon. Members in the unitary Parliament, it can whistle in the wind. It will never see the Bill become an Act.

Mr. Alex Salmond: I am still marvelling at the hon. Member for Tayside, North (Mr. Walker) reading the obituary notice of the Labour Front Bench. I saw a shiver of fear on that Bench.
I am sorry that the hon. Member for Glasgow, Garscadden (Mr. Dewar) is not here to hear me say that he is right in saying that my hon. Friends and I will support the motion. He was less than charitable to attribute to us simply tactical motives, although I dare say tactics have a place in politics, and I am sure that the Labour party employs the odd political tactic from time to time. We shall support the motion for the simple reason that half a slice of bread is better than no loaf.
I freely concede that there are aspects of Labour's devolution Bill that would bring about improvements in the government of Scotland by providing a forum in which we could address some major issues confronting the Scottish nation. It would articulate and represent Scottish opinion in a democratic fashion, as opposed to those on the Tory Front Bench, who misrepresent Scottish opinion in an undemocratic way. It would also have the potential for development, because I believe that once Scots have a whiff of power they will acquire the appetite for something a great deal stronger.
The Bill does, however, have major deficiencies, to which I shall come later. First I want to turn to the essential question in the debate, that of sovereignty.
What the Labour party will have to decide is whether it is advancing its devolution Bill just as a good idea, or as a concept for which it has a mandate from the people of Scotland. There is a world of difference between the two. If the Bill is being advanced as just a good idea from the Labour party, those on the Conservative Benches have every right to say, "We think it is a bad idea and we will use our majority to vote it down." On the other hand, if it is being advanced as a concept with the mandate of the


Scottish nation, the Labour party has the right to pursue that mandate, regardless of the result tonight, regardless of the opinion of the majority party in the House.
The question is one of sovereignty. Some hon. Members at least are clear about where sovereignty lies. My hon. Friends and I — and, I believe, the hon. Member for Falkirk, West (Mr. Canavan)—believe that sovereignty lies with the Scottish people and that it is for the Scottish people to decide what level of self-government they should have; whether it be no self-government, devolved government or full independence.
The opposite opinion is put forward by the hon. Member for Garscadden, supported by the Secretary of State. They believe that sovereignty lies in the House of Commons, that it is for the House to decide what measure of self-government the Scottish people will or will not have and that it will do with us as it will.
Over the past few years I have had great hopes that the argument for Scottish sovereignty, the sovereignty of the Scottish people, was gathering strength among Labour Members. Quite recently—on 30 June 1986—the hon. Member for Falkirk East (Mr. Ewing), said in Edinburgh, choosing his words carefully:
whatever happens at the next election, this building will become the home of the Scottish assembly." —[Official Report, Scottish Grand Committee, 30 June 1986; c. 7.]
At various times the hon. Member for Carrick, Comnock and Doon Valley (Mr. Foulkes), both before and after the 1983 election, said that he would pursue the case for devolution and achieve it, regardless of the result of the election.
The hon. Member for Glasgow, Hillhead (Mr. Galloway), admittedly before he was a Member, talked about playing Parnell with Westminster procedures to bring about a Scottish assembly. I have also had my disappointments. I had yet another one earlier in the debate when the hon. Member for Dundee, East (Mr. McAllion) said that no one on the Labour Benches was challenging the mandate of the Government to govern Scotland. I found that most interesting.

Mr. McAllion: Again the hon. Gentleman seeks to misrepresent a point of view put forward by a Labour Member, as he always does. The hon. Gentleman should spend less time on cheap stunts and try to address the central questions. He knew that the election on 11 June 1987 was for a unitary Parliament. His party has never made clear on what it would claim a mandate for independence. Our mandate was that if we won the election and formed the United Kingdom Government we would create a Scottish assembly and give expression to the legitimate demands of the Scottish people. We failed to win the election. We will do everything in our power to win the next election and deliver to the Scottish people what they want—something which the hon. Gentleman's party is incapable of doing.

Mr. Salmond: I am grateful to the hon. Member for clarifying what I said. Earlier, he said that no one on the Labour Benches was challenging the Government's mandate in Scotland. That surprised me, because an amendment to early-day motion 573, published this morning and signed by the hon. Gentleman and five of his colleagues, congratulates the hon. Member for Falkirk, West (Mr. Canavan) on his

recent efforts to expose the lack of a Government mandate in Scotland.
In our political careers we all engage in retreat, but what the hon. Gentleman has said in the debate is a remarkable retreat from the amendment to the early-day motion. He challenged the Government's lack of a mandate by signing the amendment, but in the debate he said that no one on the Labour Benches was challenging that position.

Mr. Galbraith: Does the hon. Gentleman accept that there is a difference between a legal mandate and a moral mandate?

Mr. Salmond: I am arguing that the mandate issue is the key to the debate. Until Labour Members clarify their position on whether the Government have a mandate in Scotland, they will emasculate themselves in terms of any opposition.

Mr. McAllion: rose—

Mr. Salmond: No, I am not giving way again. I have already given way twice.
Unless Labour Members are prepared to challenge the Government's mandate, they are condemning themselves to a long period of futile opposition. It is correct that, for the time being at least, Labour dominates Scottish politics, but its domination of Scottish politics is as nothing compared with the Conservative party's domination of politics in the south of England. In the south-east of England there are 108 seats outside London: 107 are held by the Conservative party, and Labour holds one seat. South of Birmingham, outside London, Labour holds three seats. That is the reality of the political balance within the United Kingdom. It is almost inconceivable that over a generation Labour could achieve the United Kingdom mandate which the hon. Gentleman wants.

Mr. McAllion: The hon. Gentleman has drawn attention to the fact that Labour holds only three seats in the south-east of England and therefore in a generation cannot achieve political power throughout the United Kingdom. His party holds only three seats in the whole of Scotland. Will it be a generation before his party can achieve political power in Scotland? If so, he is lying to the Scottish people when he says that the choice at the next election is independence or Thatcher.

Mr. Salmond: I have great hope that many people in Scotland who voted Labour and who share our constitutional position — a total of 30 per cent. according to one opinion poll—will swing to our party when it becomes clear that devolution is not on offer. Because the hon. Gentleman wishes for victory within the United Kingdom, I have real hopes that Labour voters will swing in substantial numbers to the Scottish National party.
As for the deficiencies of the Bill, perhaps the most important aspect of United Kingdom economic policy at present is the imbalance between the south of England and the regions of England and the nations of Scotland and Wales. The problem with the Scotland Bill is that it will not affect that one iota. Hon. Members representing the regions of England and the nations of Scotland and Wales have to endure a position where the Treasury is cautioned not to overheat the economy because inflation might build up in the south of England. Because of that, we have restrictive monetary policy and a fiscal policy that calls for a tight public sector borrowing requirement. The


Government's view that the economy must not overheat is a deep irony for the English regions and for Scotland and Wales, when our economies are in deep freeze.
On the critical test of what it would do for the Scottish economy, the Bill fails. It includes no monetary powers. Labour's Scottish assembly could not alter monetary policy within Scotland. The fiscal powers are restricted to raising additional taxation. The Scottish assembly could not reflate the Scottish economy; it could increase public expenditure only marginally by increasing Scottish personal taxation.
As for industry, a Scottish assembly could not intervene to save the steel industry, which would remain in the hands of the Department of Trade and Industry and the EEC. Labour's Scottish assembly could not save a single pit or shipyard in Scotland. It would not have any effect on the electronics industry, which is still struggling to achieve a critical mass in Scotland. It could not help the Scottish financial sector by establishing a taxation incentive to build on the comparative advantage that Edinburgh already has.
Worst of all, a Labour Scottish assembly would have had to stand by over the last two years and watch the oil industry decline, but have no access to Scottish oil resources. Indeed, it would have had to watch Government policy—a highly inappropriate, cheap oil policy—cost 25,000 jobs in Scotland.

Dr. Reid: It is fair for the hon. Gentleman to take a view of politics which says that the only way of recovery for the Scottish economy is to have an independent Parliament. However, it is entirely unfair to take that view and then to suppose that that is what the devolution Bill is all about. The people who drew up the Bill are not separatists. We have never claimed that a Scottish assembly would do the things that the hon. Gentleman claims it could not do. We have always argued that it is not a substitute for good United Kingdom government. It is a complementary or integral part of the United Kingdom Government. At the same time, if we want to save the Scottish economy and deal with the issues that the hon. Gentleman has raised, we need a Labour Government at Westminster.

Mr. Salmond: The hon. Gentleman is right in saying that, for some of the reasons that I have outlined, the economic case for an independent Scotland within the EEC is vastly superior to that for devolution. Even in the context of devolution we could still build more economic powers into the devolution Bill. The point I make is that the Bill has limited economic powers, and that it puts forward a minimalist position.
To give two examples, we could build into a Scottish assembly powers to control mergers and acquisitions in Scotland, and then we would not have to stand idly by, as we would under Labour's terms of reference, and watch Guinness take over Distillers. Earlier today the hon. Member for Aberdeen, South (Mr. Doran) said, rightly, that the future of Britoil was most important for the Scottish economy. Therefore, why should there not be in Labour's proposed legislation power to enable a Scottish assembly to stop the takeover of Britoil and defend Scotland's most important company? On the critical test of economic power, Labour's devolution Bill fails.
I bear no ill will for the hon. Member for Stirling (Mr. Forsyth), who, unhappily, is not here. If he were with us in a Scottish Parliament he would be a fringe figure. He

would put an eccentric Right-wing point of view against the Scottish consensus position which the other Members of that Parliament would hold. In an assembly he would perhaps provide a welcome challenge to established ideas, but, in the present ridiculous situation, this extreme figure in Scottish politics is in charge of Scottish education and the Scottish Health Service and is causing a great deal of chaos to both.
What is the argument in defence of the hon. Gentleman's entitlement to be the Minister responsible for health and education in Scotland? It was expressed clearly by the Secretary of State for Scotland in "Radical Scotland" in December 1986. He stated that the Conservative right to govern Scotland was based on the following argument:
I think that as long as the vast majority of Scots vote for unionist parties, and by that I mean Conservatives, Labour, Liberal or SDP, anything other than the Nationalists—and thereby express a clear political desire to remain part of the United Kingdom—then the only mandate that matters is the UK mandate".
This is a development in Conservative party thinking. At the time of the referendum, the Tories were pressing only non-voters into their cause. Now, in support of the mandate, they press into service Labour, SDP and Liberal voters. Labour voters and supporters are being used to reinforce the Tory mandate in Scotland. To challenge the Government effectively, we must challenge their mandate.
The Labour motion will fall this evening, and the Labour Bill which follows it will fall or be frozen, but the case for Scottish self-government will live on. It will become clear that devolution, right or wrong, weak or strong, is not on the political agenda. It is not on offer from Westminster. It is not available. On that basis, the clear choice facing the people of Scotland is either a continuation of English Tory rule, or independence within the European Community, as advocated by the Scottish National party.

Mr. John Marshall: This has been a most interesting debate. One of the more interesting things about it has been the absence of some speakers. We have not seen the hon. Member for Caithness and Sutherland (Mr. Maclennan). Of course, he may have one or two things on his mind at present. We have not seen the hon. Member for Linlithgow (Mr. Dalyell) who spoke frequently about devolution when the Scotland Bill and the Wales Bill were going through the House in the 1970s. After all, it is only a few years since the hon. Member for Linlithgow said that devolution is
not a stable resting place for five or 10 years, let alone centuries."—[Official Report, 14 November 1977; Vol. 939, c. 122.]
The most interesting point is that the Leader of the Opposition, whose name appears on the motion, has not been here to take part in the debate or even to listen. We all know why. Ten years ago, he described devolution as "ridiculous and wasteful duplication." He described the debates on devolution as being
as interesting and productive as fishing for tuna in the Taff.
The right hon. Gentleman went on to say:
anyone who regards the Bill as meaningful devolution, an attempt to convey real power to the people, to safeguard their interests or to advance democracy or an encouragement to vigilant supervision of elected government at any level, is reading the wrong Bill." —[Official Report, 15 November 1977; Vol. 939, c 465–67.]


More recently, the right hon. Gentleman said that devolution reform will not provide a factory, a machine or jobs. Why is the Leader of the Opposition not here to restate those fundamental truths about which he spoke with such eloquence in the past?

Mr. Fallon: Has my hon. Friend asked himself not only why the Leader of the Opposition is not here, but why the Scottish Labour party is not here, if it is so keen on devolution? There are only seven hon. Members on the Opposition Benches, yet we are told that the Scottish Labour party wholeheartedly supports devolution.

Mr. Marshall: The enthusiasm of the Scottish Labour party for devolution is as great as the enthusiasm of the Scottish people when they were asked that specific question in 1979. As my hon. Friend knows, only 32 per cent. of the Scottish people voted for devolution in the referendum.
Let us consider the regional breakdown of that figure. There were a number of areas where the debate was against devolution. In Tayside, 50·5 per cent. of those who voted, voted against devolution. In the Grampian region, which used to be represented by the hon. Member for Glasgow, Garscadden (Mr. Dewar), the figure was 51·7 per cent. In Dumfries and Galloway, the figure was 59·7 per cent. In Orkney and Shetland, it was over 70 per cent. In the Highlands, the figure for devolution was only 51 per cent., and in Lothian it was only 50·1 per cent. My hon. Friend is quite right. The enthusiasm of the Scottish Labour party for the Bill is as muted as the Scottish people's enthusiasm was in 1979.
It is clear that the economic effects of the Bill could be quite traumatic. The Scottish economy seeks to attract industry from outside Scotland and to encourage it to put its roots down in Scotland. I should like to pay tribute to the success of the Secretary of State in attracting so much new industry to Scotland. What incentive would it be to go to an incoming industrialist and say, "Come to Scotland. Your taxes on your employees and on your managers may well be higher than they would be if you stayed in England or went to Wales, but come to Scotland and run the risk of higher taxes."? No one would come to Scotland in those circumstances.

Mr. Menzies Campbell: Does the hon. Gentleman agree that if people coming to Scotland could be assured that they would have higher standards of education for their children and higher standards of National Health provision, they might be prepared to pay additional taxes for that purpose?

Mr. Marshall: The hon. Gentleman should consider the figures for education in Scotland and the results from Strathclyde regional council, which give a good guide of how a devolved Scotland would work. No doubt he has seen the written answer, given on 27 October 1987, which shows that 27·6 per cent. of children leaving Strathclyde schools do so without any SCE qualifications. Given the high levels of expenditure in that part of Scotland, I do not understand how the hon. Gentleman can say that higher expenditure necessarily leads to better standards. One could not, therefore, go to an incoming industrialist and promise better standards through higher taxation.
Let us consider the record of Labour councils in Scotland.

Mr. Galbraith: What school did the hon. Gentleman go to?

Mr. Marshall: I went to that same school as the hon. Member for Garscadden. His parents and mine exercised freedom of choice. I am sorry that he and his colleagues do not believe in the same freedom of choice today. The hon. Member for Garscadden and I left Aberdeen in the 1970s, but I did so somewhat more willingly than he did.
Labour Members make it clear that they oppose all steps to improve efficiency and government by competitive tendering. This afternoon, we heard them condemn competitive tendering in the National Health Service. They would say to the industrialist, "Come to Scotland. We shall not have competitive tendering in the Health Service, and that will lead to better service for the same expenditure." It will not. It will lead to worse service. Labour Members make it clear that they want higher expenditure for a whole range of services which, if the Bill were enacted, would lead to higher taxation in Scotland. There is no doubt that the consequence of the Bill would be an over-governed and over-taxed Scotland. The influence of the Secretary of State and of the Cabinet would be reduced.

Mr. Galbraith: Hear, hear.

Mr. Marshall: I am glad that the hon. Gentleman agrees with me, but I am sorry that he welcomes the fact that under the Bill the influence of the Secretary of State will be reduced. His influence is for the good of Scotland as a whole.

Dr. Reid: Given that the hon. Gentleman is greatly concerned about corporate and industrial taxation, for the enlightenment of the House will he mention one clause that empowers the assembly to make such taxation charges?

Mr. Marshall: I thought that I had made it clear that I was talking about taxation on individual employees and managers. Individual managers will decide whether to locate their factory in Scotland. How will one encourage a manager to locate his factory in Scotland by saying, "Come to Scotland and run the risk of higher taxation."? That threat will frighten away industrialists and discourage them from coming to Scotland.

Mr. Galbraith: Will the hon. Gentleman give way?

Mr. Marshall: I have given way generously and my hon. Friends have given way several times to the hon. Gentleman, so he must wait to make his speech in his own time.
I am concerned also about what is known as the West Lothian question—perhaps there is also the Linlithgow question—to which the Opposition have not given an adequate answer. Everyone knows that, on grounds of population, Scotland is over-represented in the House of Commons. We know the good geographical reasons for that—constituencies such as Western Isles and Orkney and Shetland need smaller electorates and could not be lumped with another constituency. It is inevitable, for geographical reasons, that, given the current unitary system of government, Scotland should remain overrepresented in the House. If we had a system whereby Scottish matters were devolved to an assembly, how could we justify Scotland still being over-represented in the


House? How could we justify Scottish Members voting on English issues but English Members not being able to vote on Scottish issues?

Mrs. Margaret Ewing: I do not vote on English issues.

Mr. Marshall: It may he true that the hon. Lady, who is currently the hon. Member for Moray but was previously the hon. Member for Dumbartonshire, East, does not vote on English issues. Let us look at some of the voting records in the House. In the last Parliament there was a debate on the shops legislation, which sought to give shoppers in England and Wales the same privileges as are given to shoppers in Scotland. Did Scottish Labour Members say, "How wonderful it is that England and Wales are to have the same privileges as shoppers in Scotland."? Of course not. They voted against the Bill.
I should not have thought that any Opposition Member would say that the abolition of the Greater London council was an issue affecting Scotland, but Scottish Labour Members were willing man after man to vote against it. I believe that the Labour party has been willing to put Scottish Members on the Committee that is considering legislation on the community charge for England and Wales. It may be all right for the hon. Member for Moray (Mrs. Ewing) to say that she will not vote on English matters, but a large number of Scottish Labour Members will vote time after time on English matters to try to impose their will on English constituents such as mine.
The Government want genuine devolution rather than administrative devolution. [HON. MEMBERS: "Oh!"] We believe in real devolution to real people.

Mr. Rifkind: My hon. Friend referred to Scottish Labour Members on the Committee on the English community charge legislation. He will have noted the anxiety of the hon. Member for Strathkelvin and Bearsden (Mr. Gabraith) to intervene earlier. My hon. Friend may be as curious as I am about the relevance to the hon. Gentleman's constituents of the hon. Gentleman serving on the Committee on the Duchy of Lancaster Bill.

Mr. Marshall: I find it as difficult to understand as my right hon. and learned Friend. No doubt strange things happen in the House from time to time.

Mr. Galbraith: Will the hon. Gentleman give way?

Mr. Marshall: I have already once refused to give way.

Mr. Galbraith: Give way briefly.

Mr. Marshall: Briefly.

Mr. Galbraith: Is the hon. Gentleman aware that the Duchy of Lancaster Bill is in some way related to Bonnie Prince Charlie and is therefore relevant to my constituents?

Mr. Marshall: My sister tells me that the hon. Gentleman is a very good doctor. Having heard that observation, I wish that he would go back to doctoring instead of coming to the House.
We believe in giving real devolution to real people. The Government have done so, for example, by giving trade unionists the right to vote on strikes and to elect union leaders in secret ballots. They have given real devolution to real people to make real decisions affecting their lives. We heard this afternoon how tenants in Castlemilk

preferred not to be subject to the Glasgow housing authority, but wanted to transfer to Scottish Homes. We are giving parents in England and Wales the right to make decisions about their children's education. We believe in giving individuals the right to decide how to spend their money rather than have it taken away by the tax collector.
Those who seek devolution should devolve ownership to individuals. We look forward to devolving to individuals the ownership of the Scottish electricity industry as shareholders rather than by proxy, as taxpayers. We heard this afternoon's statement about the future of the Scottish Bus Group. I am sure that its employees will have heard with interest the reply by my right hon. and learned Friend the Secretary of State to my question about giving priority to the employees when the industry is privatised.
If the Scotland Bill were passed, it would be the first step towards the break-up of the United Kingdom. A group of northern Labour Members has presented a Bill to have a similar assembly for the north of England. No doubt these proposals would mushroom quickly. The problem is that once we have gone down the assembly road and it has failed to produce the goods, there would be further pressure from the hon. Member for Moray and others to go down the separatist road. We would find that, in the words of the hon. Member for Linlithgow, devolution
is not a stable resting place for five or 10 years, let alone centuries."—[Official Report, 14 November 1977; Vol. 939, c. 122.]

Mrs. Margaret Ewing: Does the hon. Gentleman agree with a point made earlier, that, on the basic principle of assessing the needs and desires of the Scottish people for freedom, the bounds of freedom should be set by the sovereignty of the people of Scotland and not by this establishment?

Mr. Marshall: I feel that the people of Scotland do not want the Bill. They do not want narrow-minded nationalism or self-centred separatism.

Mrs. Ewing: How does the hon. Gentleman know?

Mr. Marshall: When the question was put to the people of Scotland in 1979—

Mrs. Ewing: They said yes.

Mr. Marshall: As the hon. Lady knows, 32 per cent. said yes; the others voted against or abstained. As the hon. Lady well knows, it was made clear that, as a result of the amendment moved by a Labour Member, Mr. George Cunningham, if there were not a 40 per cent. vote in favour, the devolution proposal could fall. Everyone who was against devolution had either to vote against it or to abstain. An abstention was as good as a vote against. The hon. Member for Moray is well aware that leaflets were distributed telling people that they did not need to vote against devolution but could abstain if they did riot support the proposals. When the question was put to the Scottish people, they decisively rejected—

Mrs. Ewing: They said yes.

Mr. Marshall: If the hon. Lady regards one in three as a majority, she has strange mathematics.
This Bill would result in an over—

Mr. Dewar: Does the hon. Gentleman regard our entry into the Common Market as invalid, because the same arithmetic applies to the referendum on that matter?

Mr. Marshall: As the hon. Gentleman well knows, we joined the European Community in 1973 and the referendum that was conducted under a Labour Government did not have a percentage attached to it. As he also knows, it was an advisory referendum. He may well scoff at the term used, but it is not my term; it is the term of the then Labour Prime Minister, now Lord Wilson. If he regarded it as right—and it was the Labour party in this House that voted for it—it ill behoves him to scoff at the proposal put forward by his own party.
The hon. Gentleman and I went to the same school. He may regret the fact that he went to a public school or that it is brought to the attention of his colleagues; but I feel that he ought to produce a better argument than that.
This Bill would lead to a Scotland that was over-taxed and over-governed. It would put at risk the economic development of Scotland, and would, in the words of the Leader of the Opposition, be as
interesting and productive as fishing for tuna in the Taff."—[Official Report, 15 November 1977; Vol. 939, c. 465.]

Mr. John McAllion: I have listened very carefully to the hon. Member for Hendon, South (Mr. Marshall), and having done so, I am more than ever convinced of the necessity for a Scottish assembly to be established, so that the people of Scotland may deal with their own affairs. His disgraceful contribution, showing his vast ignorance of matters Scottish, was beyond belief.
The irony of our debating this subject here tonight lies not so much in the fact that we are having the debate; given that 76 per cent. of Scottish voters voted in the last general election for some form of devolved assembly, it would be incredible had there been no debate of this kind early in the life of this Parliament. The irony is the fact that we know, before the debate starts, what its outcome will be: we know the result of the vote.
We know, for example, that a motion endorsing a Bill to establish a Scottish assembly, an assembly with a wide range of responsibilities for education, housing, transport and local government, an assembly which will have tax-raising and economic powers, the kind of assembly which voters in 50 out of 72 Scottish constituencies voted for last June, will be defeated in the House tonight by what is, in effect, a Tory rump in Scotland.

Mrs. Margaret Ewing: Does the hon. Member not agree that it is particularly appalling that there are so few people here on the Government Benches—only one Member representing a Scottish constituency and five Members representing English constituencies — listening to this vital debate which the people of Scotland see as so serious?

Mr. McAllion: The hon. Lady makes a valid point: it is appalling. But it is not surprising; it is par for the course, given the way in which Ministers and Tory Back Benchers in Scotland treat the affairs of Scotland as something insignificant. One of the things that has affronted me since coming here is the number of Scottish Members on the Government Benches who time and again say that they do not wish to be thought of as Scottish Members but as United Kingdom Members. I am fiercely proud to be thought of as a Scottish Member and I only wish that the same pride was shown by those on the Government Benches as well.
So the motion will be defeated by a Tory rump. I see that the Secretary of State is now scuttling out; he has had enough already. It is a shame, because I have a few remarks to make about him later on.
It is shameful that a handful of Ministers and a few Back Benchers—a rag-bag of Scottish Back Benchers—in alliance with a huge majority of English Members, who know little of Scotland and care even less, will ensure that the motion and its proposal for an assembly will be defeated tonight. It shows not only that they do not care about the needs of the Scottish nation, but that they are determined to trample the needs of that nation underfoot in their desire to show the supremacy of their numbers here. That is entirely regrettable.
Government Members must recognise that Scotland is a nation. There is no doubt whatever about that. It is something that they seem incapable of recognising. They seem to think that Scotland is just like a region of one nation, like the north-east, the north-west or the south-east of England. It is nothing of the kind — it is a nation, and it must be recognised as such by this United Kingdom Parliament, or it will be to Parliament's regret.
Scotland is a nation which chooses to join, along with other nations certainly, in a partnership of equals which we know as the United Kingdom. We choose to belong; we are not trapped inside it. We can equally choose not to belong to it, and Government Members should remember that as well. We have had a lot of talk from those same Members about the reality of the unitary nature of this Parliament and the way in which it considers legislation, such as Bills of this kind. I accept that that is the case: the House operates as a unitary Parliament.
All hon. Members who stood for election last June were fully aware of the nature of the elections in which they took part. They were elections to a unitary Parliament. They were elections which, if we were to win them, we would have to win under a first-past-the-post electoral system.
It is only fair for Opposition Members to concede that, had any of the major political parties achieved 42·4 per cent. of the vote in the United Kingdom elections, and if we had won more than 370 seats in this House, we would naturally have been hailing that as a marvellous victory and would have seen it as a mandate to go ahead and implement our policies. I concede that the Conservative party in the United Kingdom elections won such a victory and, while I believe that to be a tragedy, not only for the Scottish people but for the people of the whole kingdom, I accept that the Conservative party won and, under the existing constitutional arrangements, legitimately formed the Government of the United Kingdom.
But with victory, and with the power that comes in the wake of victory, comes also responsibility. It is the acceptance of that responsibility which has been so sadly missing in the conduct of Scottish affairs by the Government since they were returned to power on 11 June. What they must recognise is that the particular needs and desires of Scotland, within the framework of the United Kingdom, must be recognised by any responsible Government. If the Government aspire to be a responsible Government, they must recognise the legitimate needs of the people of Scotland. If they do not, the unity of the United Kingdom will be put at risk.
The United Kingdom framework is not a trap within which Scotland is confined and rendered incapable of giving expression to its democratic wishes and desires,


because Scottish democracy must be given freedom to express itself—not only must but will be given freedom to do so, because there is no force in this or any other Parliament which can deny the Scottish people once they have decided on a course of action. Sooner or later, Ministers will have to recognise that fact.
The reality in Scotland is that its people want a devolved assembly to run exclusively Scottish affairs—housing, education, transport and so on. The more I listen to English Members, the more I see the validity of that argument. At Question Time, the Secretary of State for Scotland gave a very unsatisfactory answer to a Question from my right hon. Friend the Member for Falkirk, West (Mr. Canavan), who asked him about evidence of the demand for a devolved assembly.
The Secretary of State gave a response which was very similar to the answer given by the Prime Minister who was asked the same question in 1986, when she appeared on Scottish television. I have a press cutting here from The Scotsman which refers to the occasion:
Eighty per cent. of Scots interviewed in a Scottish Television-MORI opinion poll are in favour of a Scottish Assembly, it was revealed last night on the programme Scottish Questions. MORI questioned 1,012 Scots in September after Mrs. Thatcher said on Scottish Television that she did not believe there was sufficient demand for an Assembly".
How can the Secretary of State for Scotland and the Prime Minister look that kind of evidence in the face–80 per cent. of people questioned in an opinion poll—and then turn round and say that they cannot see any evidence of a demand in Scotland for a devolved Scottish assembly? The Minister may say that they do not take opinion polls seriously. If that is the case, they should, because opinion polls are more often right than wrong, as we have learnt to our cost in recent elections.
All the opinion polls conducted of the views of Scottish people in relation to a Scottish assembly have consistently shown that the huge majority of Scots support the idea. Such evidence must be taken seriously by the Secretary of State for Scotland and by Conservative Members.
If the Government will not accept the evidence of polls, perhaps they will accept the evidence of general election results. I do not wish to labour the point, but in the last general election three out of four Scots voted for parties offering some form of devolved assembly in Scotland.
If the Secretary of State and his Ministers will not take election results seriously—it would appear from their response that they do not—one must ask what they will take seriously. Would they take a referendum of the Scottish people seriously? The Secretary of State denied that when he answered my hon. Friend the Member for Falkirk, West during Scottish questions today.

Mr. Andy Stewart: The hon. Gentleman asked whether the Government would take a referendum of the Scottish people. Is he aware that there are more Scots living outside Scotland than there are inside it? What about their views?

Mr. McAllion: Scots who decide to live outside Scotland must accept that in so doing they lose any influence over what might go on in the country that they have chosen to leave. It is the people who live in Scotland who matter most, not expatriate Scots.

Dr. Reid: Does my hon. Friend recognise that the suggestion of the hon. Member for Sherwood (Mr.

Stewart) was merely a ploy to give people of Scottish origin living in the south-east a vote in Scottish elections? It is the only way in which the Government will have a Tory Member of Parliament elected.

Mr. McAllion: If we return to the referendum that was held in 1979, it must be remembered that the financial and professional campaigning advantage lay entirely with the "no" campaign. We must remember that leading Conservatives were urging people not to vote for an assembly, not because they are opposed to devolution but because the Conservatives intended to introduce an improved form of Scottish assembly, with tax-raising powers. Even in those peculiar circumstances, the Scots voted by a clear majority for a Scottish assembly. Yet to this day it is denied them.
All the available evidence, whatever criterion is applied, tells the Government that the Scottish people want a Scottish assembly, yet they refuse to listen.
If the Secretary of State is a genuine democrat and is concerned to give the Scottish people what they want, he must concede the assembly that they have voted for on so many occasions.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) mentioned Councillors Meek and Stevenson. For the benefit of hon. Members who were not present, they are Tory councillors in Scotland who remain sympathetic to the devolution case. They recognise that the interests of Scotland and the Conservative party in Scotland lie in the establishment of a Scottish assembly.
That must be emphasised, because Ministers have not yet grasped that the position of the Tory party in Scotland is drastic. In the election last year, its performance was pathetic. It went from holding 21 seats in Scotland to only 10. If it had not been for the intervention of the SNIP in Stirling and Ayr, a further two Conservative Members would not have been elected. The Conservative party's support plummeted to 24 per cent. of the Scottish electorate.
The Secretary of State for Scotland hoped for a much better result in the last election. About 15 months ago, The Scotsman —admittedly in pre-general election circumstances—said that the Secretary of State believed that the Conservatives
can still win almost one-third of the vote in Scotland at the General Election … The Government's privatisation programme will be one of the key factors in boosting their flagging support.
He could not have predicted the result more wrongly.
The Secretary of State compounded the felony in the same interview. When asked what he thought the likely impact of the poll tax would be on the general election, he said:
I have yet to find a single MP or candidate who tells me other than it is one of the best assets we have. They say, 'It is very popular … Don't listen to the press and don't listen to the comments made. If you drop it, it will be disastrous. We are getting a marvellous reception among the ratepayers in our areas.'
The Conservative party was given a marvellous reception — not for the Secretary of State for Scotland but for Labour Members. I suspect that Messrs A ncram, MacKay, Fletcher, McQuarrie and the rest have since changed their opinion.
It is not only a matter of the last general election results. Over the past five general elections in Scotland, the average vote for the Conservative party has plummeted to a mere 28 per cent. of the vote. If we compare that with


the five previous general elections, when support for the Conservative party stood at 43 per cent., one can see the perilous position into which it has fallen. That decline in support is directly related to the Conservative party's inability to listen to what the people of Scotland want.
The case for an assembly has more depth than election results or the position of political parties in Scotland. The vital interests of the Scottish people would be better served by the establishment of a Scottish assembly and by the Scots taking control of their exclusive affairs.
Earlier, the Secretary of State mentioned what he thought was an economic case against the establishment of a Scottish assembly. He expressed it in terms of the relative tax burden between England and Scotland for managers of companies. There is an outstandingly strong economic case for a devolved assembly, as has been made clear in the press in Scotland:
Following a debate on the place of Scotland in a changing world, at the international forum of the Scottish Council (Development and Industry) at Gleneagles, the Glasgow Herald, which is not considered a Left-wing paper, commented on the problem of de-industrialisation in Scotland:
The decline of manufacturing industry in Scotland in the past decade is well known and not disputed".
It is well known and not disputed by everyone in Scotland outside the ranks of the Conservative party.
In the same interview in The Scotsman, the Secretary of State said:
Increased output … enabled investment in modern technology to be combined with the retention of the same number of employees"—
significantly, he added—
as last week's £62 million investment programme in Caterpillar's, Uddingston plant has demonstrated.
The Secretary of State held up the announcement by Caterpillar that the Government would invest £62 million as an economic success of the Government. We all know what has happened since.
The Glasgow Herald commented on a paper that had been put forward by a Dr. Buxton, who had addressed the problem of Scottish industries and what was needed. He was arguing for an increase in regional aid, which again is a problem from which we have suffered since the election. He said that a solution for Scotland's problems would be a Scottish assembly with economic powers. He further said:
This is an idea … whose time has come.
I do not wish to offend Liberal Members by repeating the phrase, "This is an idea whose time has come." A Scottish assembly is an idea whose time has come.
The Glasgow Herald is considered to be a Right-wing paper in Scotland. In the same article, it said:
But the case for an Assembly does seem overwhelming, if only as a means of arresting the movement South of decision-making and key services, to the great detriment of the Scottish economy. It is extremely doubtful if the Scottish interest would have been treated with such contempt in the recent takeover of DCL if there had been a Scottish Assembly in Edinburgh.
The editor of the Glasgow Herald summed it up by saying:
Only the Conservatives now stand against an Assembly and it is unlikely that they will recover the esteem of most Scottish people until they change their minds.
This is the occasion when Conservatives in Scotland should begin to change their minds about their attitude to the Scottish Assembly.
The Secretary of State and his Ministers may be content that the Conservative party should stand between the people of Scotland and what they want. If that is so, that is his affair. However, if he and his friends persist in that course, it will no doubt be to their political cost in terms of seats in Scotland. The Conservative party cannot be complacent about this. As we heard, the right hon. Member for Ayr (Mr. Younger) and the hon. Members for Stirling (Mr. Forsyth) and for Tayside, North (Mr. Walker) had close-run results in the last general election. They and other Scottish Conservative Members will be vulnerable at the next general election. The people of Scotland will make them pay the price of ignoring what the people of Scotland are continually telling them by every available means — that they should set up a Scottish assembly.
The lack of such an assembly has cost Scotland dear. This week, I am serving on the Committee dealing with the Housing (Scotland) Bill, and it is becoming increasingly clear that it is doing nothing for the real housing needs of the people of Scotland. For example, in Committee attention was drawn to the plight of the homeless. There are 31,000 families and individuals homeless in Scotland, but there is not a scrap, a word, a dot or a comma in that Bill which does anything for the homeless. In the whole legislative process, from the consultative document, through to the Green and White Papers and now to the Bill, only one paragraph is devoted to the needs of the homeless, and that says that no specific action is needed to deal with the homeless. That shows the ignorance of Conservative Members, and their contempt for the needs of Scottish people.
It has been said that a Scottish assembly would push us down the slippery slope to separatism. I do not agree. If anything, it is the denial of the Scottish Assembly which is pushing us down that slope. The Conservative party seems to be intent on pushing the people of Scotland in that direction. This measure affects more than Scotland, because this has been one of the most centralising and authoritarian Governments in the post-war period of the United Kingdom's history.
Let me take one example. The poll tax has nothing to do with improving the accountability of local councillors, and everything to do with a direct attack on local government and democracy. For a start, only 20 per cent. of local government funds will be directly under local government control. There is a built-in escalator for the poll tax because, by freezing the business rate and linking it to the rate of inflation, the Government are ensuring that the poll tax demands will increase enormously if the legislation ever comes into place in Scotland.
The Government hope that the increase in the poll tax will bring the local electors into conflict with local councils, and will lead to people doubting the wisdom of spending money on good local services. That will open the way for the Government to undermine local authorities, and they will attempt to do away with local democracy altogether.
The Scotland Bill, which will set up a Scottish assembly, will be of great benefit to the Scottish people and to the people of the rest of the United Kingdom, because it will show them the way to go and the way in which to fight back against centralisation and authoritarianism. It is a beacon to everyone in Britain, and it should be supported by every hon. Member.

Mr. Michael Fallon: Having sat through most of the debate, I have more respect for the position of the Scottish National party than I do for that of the Labour party. If the Scots really want devolution, the Labour party is a poor advocate for it. We had a halfhearted speech from the hon. Member for Glasgow, Garscadden (Mr. Dewar), and throughout this debate he has not managed to muster more than half a football team to support him.

Dr. Reid: How many Tories are present?

Mr. Fallon: It is not our Bill. It is a Scottish Labour party Bill and it is a tribute to the lack of interest and enthusiasm for the Bill that the party has not been able to muster many Members here in support of it.
I do not agree with the Scottish National party's theory of the inexorable logic of devolution. If one wants to see Scotland as an independent Socialist state, one is entitled to argue for a Scottish assembly. Already in Scotland we see something approaching a Socialist state. Some 48 per cent. of the gross domestic product in Scotland is consumed by public expenditure. Half of all Scottish housing is public housing. Half of all Scottish taxpayers receive some kind of benefit. Some 25 per cent. of Scottish adults work for either local or central Government in Scotland. The nationalised industries of shipbuilding, steel and coal are a major part of the Scottish industrial economy. There are well-endowed publicly funded agencies, such as the Highlands and Islands Development Board and the Scottish Development Agency. A Socialist system already exists in Scotland. Conservative Members will vote against the motion in support of the Bill because an assembly would preserve all that.
It was Enoch Powell who correctly said, in the different context of Northern Ireland, that powers devolved are powers retained. The establishment of an assembly would formalise the development of this kind of Socialist centralism. It would perpetuate the long-standing tradition in Scotland of political interference in economic and social decisions that would otherwise be left to the marketplace. We would see in the assembly, as we see already on the Opposition Benches, micro-politicians from micro-constituencies with a micro-Scottish outlook. The assembly, if it ever came into being, would entrench the policies to which the Labour party is committed —policies of public ownership, higher subsidy of public spending and protection from competition.
The assembly would be bound to reflect the obsession that we have seen with the Scottish ownership of particular industries. We would see preserved, year after year, the coal, steel and shipbuilding sectors of the Scottish economy that have been its most significant failures over the past 10 to 15 years, and, by contrast, we would see little support for the private sector of the Scottish economy, with the newer industries such as electronics.
Secondly, we would see in the assembly ever-increasing encouragement for higher rates of public subsidy and higher levels of public spending. We would doubtless see fresh calls for subsidy from every assembly constituency. Public spending in Scotland is already over 26 per cent. higher per capita than in England. At Question Time today we hard that spending on industry and employment in Scotland is 97 per cent. higher than it is in England, and that spending on housing is 113 per cent. higher per capita

than in England. Some £2,500 is spent on every Scottish man, woman and child, and less than £2,000 is spent in the same way in England.
Thirdly, a Scottish assembly—the hon. Member for Garscadden specifically based the need for a Scottish assembly on what he called the Scottish psychology — would inevitably be far more insular than anything that we have seen before. It would lead to increasing calls for protection from competition. We have already seen the obsession with preserving a few jobs at Ravenscraig, [HON. MEMBERS: "Oh!"] I say "a few jobs at Ravenscraig" because it employs 3,100 people, which is a small proportion of those who are employed in many of the newer and more important energy industries offshore.

Dr. Reid: About 3,500 people are employed at Ravenscraig, and the spin-off effect on outside contractors means that 20,000 jobs are involved. Would the hon. Gentleman say that 20,000 jobs lost in an area with male unemployment of almost 22 per cent. was an insignificant figure?

Mr. Fallon: I was contrasting the number employed directly at the Ravenscraig works with the number employed in many more recent and successful industries, such as the development of offshore oil. One of the lessons that we have learnt in some of the areas of highest unemployment is that where a particular process is outdated and in decline — I cast no aspersions on Ravenscraig — and therefore unable to compete, the longer one perpetuates it, the more difficult the task of re-employing and retraining becomes.

Miss Mowlam: Will the hon. Gentleman give way?

Mr. Fallon: No, I must get on.
After Ravenscraig, we saw the same obsession with preserving administrative head office jobs at Britoil. We heard nothing of that when BP was allowed to take over one of the largest companies in the United States. Tragically, some years ago the Labour party showed a similar obsession when the Royal Bank of Scotland had the chance of going into venture with the Hong Kong and Shanghai bank. We are learning the lessons from that as we watch that bank divesting itself of certain interest because of the changes taking place in Hong Kong— interest that would otherwise have accrued to the United Kingdom economy.
A Scottish assembly would crystallise all that. Which company thinking of investing in Scotland would not be deterred by the prospect of being locked into the Scottish economy and being told by assemblyman after assemblyman, "Your company must not be allowed ever to remove its head office from Scotland."? Of course that would deter potential investors.
A Scottish assembly in the form in which it has been presented today represents a colossal red herring for the future development of the Scottish economy. In pursuing the idea of increased devolution in Scotland, the Scottish Labour party is ducking the question of where the Scottish economy should be going. If Opposition Members believe that the policies of the past eight or nine years have been successful, clearly the credit should go to the Government. If they believe that the policies on the Scottish economy have been a failure, why are they asking for more of the same—more public ownership, more subsidy, and more


protection from competition? They must make up their minds, and they cannot plead the case for an assembly simply by asking for more of the same.
It was not until my hon. Friend the Member for Eastbourne (Mr. Gow) made his speech that we got to the heart of the issue. For the Scottish economy, the heart of the issue is that Scotland already has too much government. It does not need more. If we believe that free enterprise and the free society are premised in Scotland, as in England, on freedom of government, we must accept that they are equally premised on freedom from government.
Instead of wasting our time on an issue that was disposed of in the 1970s, we should consider ways in which we can genuinely devolve power to Scotland — as my right hon. Friend the Member for Hendon, South (Mr. Marshall) suggested — not to assemblies and assemblymen and all the bureaucracy that would accompany them, but into the hands of ordinary people. We could achieve that by promoting policies of private ownership, private housing, and private enterprise, rather than by creating a talking shop.

Miss Mowlam: If the hon. Gentleman is so keen on private housing and private ownership, can he explain why Darlington has had 70-plus grants of £25,000 or more—through regional development grants and regional selective assistance—since 1979? If it is not good enough for Scotland, why is it good enough for Darlington? If he thinks that we can lose 3,000 jobs at Ravenscraig, would he adopt a similar attitude to the loss of 3,000 jobs at British Steel on Teeside, where some of his constituents live?

Mr. Fallon: Let me deal with those points in order. I have dealt with the first already in my speech and we dealt with it at Question Time. Industrial subsidy is so much higher in Scotland than it is in England that areas such as the north-east are put at a significant disadvantage. The hon. Member for Redcar (Miss Mowlam) should join me in asking for more equal treatment. If regional assistance is available, it should be equally and fairly distributed between equivalent areas of high unemployment.
With regard to the 3,000 jobs at Ravenscraig, it is my belief that the British Steel Corporation would have been in a much better position if some years ago it had made the tougher decisions that it is now having to make. Had it done so, the hon. Lady's constituents would now be enjoying the benefits of owning shares in a successful private British Steel Corporation. As I understand that most of her constituents are in favour of the privatisation of British Steel, all of us on Teesside look forward to seeing how she votes on the legislation later in the Session.
I was arguing the case for real devolution, into the hands of ordinary people. There are other Bills before the House that accomplish that aim: for example, the Government's proposals to put real power into the hands of Scottish housing tenants and Scottish parents, and real and effective power into the hands of the users of Scottish local government services.
This afternoon my right hon. and learned Friend the Secretary of State announced the first step towards privatising the large nationalised industry sector in Scotland. I hope that the privatisation of the Scottish Bus Group will soon be followed by equal and popular

privatisations of other nationalised industries. I hope that my hon. Friends will move on and examine the work of some of the development bodies and agencies to see which of them might be privatised and turned into successful investment institutions. There is no reason why those south of the border should subsidise development bodies that have outlived their natural purpose.
It is clear that the Scottish Labour party has lost interest in the Bill. Opposition Members may have been enthusiastic when they first arrived in the House, and we understand the pressures between Left and Centre, Right, soft Left and soft Scottish Left and so on. Some Labour Members want an independent Socialist state in Scotland. Others are determined to remain Members of the United Kingdom Parliament. They must take this discussion away from the Floor of the House and settle it at meetings of the Scottish Labour party.

Mr. Sam Galbraith: The speech of the hon. Member for Darlington (Mr. Fallon) was one of the most disgraceful contributions that I have heard in this place. If anything highlights the need for devolution, it is his contribution. He is nothing more than a political Contra; as the Tory party in Scotland cannot muster any of its troops, it pays people such as the hon. Member for Darlington in kind to come here and hurl abuse at us about something of which he knows nothing. He is nothing more than a little primary school boy masquerading as a Member of Parliament. [HON. MEMBERS: "He is not a primary school boy."] I am doing him a service. He is a nursery school boy, then.
The hon. Gentleman pretends to know something about the people of Scotland. He has given us a classic example of what is happening in the Tory party in Scotland. Conservative Members tell us that they know best, just as the hon. Member for Darlington told us that he knew best. He cannot get a seat in Scotland and has to come down south because the people up north will reject him. He tells us what will happen if there is a Scottish assembly. He says that the Scottish people will want this, that, and the other, but are not to have them because this political Contra—this little schoolboy from Darlington—happens to know what is best for the people of Scotland.
I do not want to follow Conservative Members' example in harking back to the arguments of 10 or 15 years ago, when I was not a Member. The world moves on, and I would have hoped that Conservative Members would move on. Indeed, I wish that some of them would move on and move out.
Let me deal with a few of the points raised about a Scottish assembly. I do not wish to get into the mandate argument because, as I said to the SNP hon. Member for Banff and Buchan (Mr. Salmond), there are political, constitutional, legal and moral mandates, and they are all different. One of the most important reasons for devolution in Scotland is the need to improve the government of Scotland. We already have a devolved administrative structure, but it is not accountable to the people of Scotland, and that is one of the arguments in favour of an assembly.
The hon. Member for Darlington talked about devolution as Socialist centralisation. That seems to be absolutely incredible—a contradiction in terms. The whole basis of devolution is decentralisation of power.


Over the past few years, the Government have concentrated more and more power in their own hands. We wish to reverse that process, decentralise power, and return it to the people in whose name we exercise power.
Conservative Members always seem to get uptight about the West Lothian question.

Mr. Bill Walker: The hon. Gentleman should ask Tam. He will tell him.

Mr. Galbraith: Good gracious, that was a significant contribution from the hon. Gentleman.
It is a constitutional anomaly. There are numerous anomalies, but they do not mean that the constitutional edifice will come crashing down. Normally, we could accept that and learn to live with it.
Conservative Members always talk about what happened when Labour had a majority in Scotland. They will agree that there was rough equivalence. We did not have the present position in Scotland in which there is a rump of Conservative Members. English Tory Members forced legislation on Scotland. That is a different matter. Scottish Labour hon. Members did not vote for things that they did not believe in or did not want.
In contrast, let us examine the poll tax. It is the Westminster question. English Tory hon. Members were happy to force legislation on to the Scottish people. When they themselves considered it, they suddenly found that they did not want it. We did not do that. We must address that matter.
The other issue relates to the number of Scottish Members who believe that we should continue to have the same number of Scottish Members. I agree with the present Secretary of State for Scotland. During the debate on the Scotland Bill on 31 January 1978, he said:
However, there are powerful arguments that a reduction of Scottish representation, although it might appear superficially to be a reasonable proposal, would be damaging to the unity of the United Kingdom.
Later, he said:
Therefore, to suggest in that context that there is an overall case for reducing Scottish representation is misguided.
Later still, he said:
For this reason I believe that Scottish representation at its present level can be justified and that it should continue irrespective of the implementation of the Bill."—[Official Report, 31 January 1978; Vol. 943, c. 344, 348, 349.]
Let us hear no more from the Secretary of State for Scotland about that matter.
For some Conservative Members, taxation seems to be the crux of the matter. I shall deal briefly with the nonsense that we hear about companies not locating in Scotland simply because income tax might or might not be a penny more. There is no evidence for that. The Government were always concerned about rates — they are a form of taxation—and variable rates and how they would stop various industries going to Scotland. The Government set up a study at the university of Cambridge, which showed that the level of rates had no bearing whatever on whether industries located in a particular area. The reasons depend on such things as infrastructure, education, roads, ports, the amount of labour and whether it is qualified. Such factors, not the level of taxation, determine where a company will locate.
The Government's thinking seems to be confused. I was interested in the Secretary of State's contribution. His complaint seems to be that, somehow, taxation is not high

enough and that we have not advocated more and more taxes. That confusion is highlighted by two conflicting reports in the Glasgow Herald of 14 January 1988. On one page, an article reports Lord Goold as stating:
an assembly with tax-raising powers would he dangerous".
On another page, I find the Tory Reform Group in Scotland advocating that we should have an assembly that should not only raise its own taxes but be able to introduce new taxes and abolish old ones. Another part of the same report states:
I cannot believe that it will mean reduced taxation, so we have to look at a possible extra tax burden on individuals".
That is totally contrary to what is said in other areas. The Conservative party is totally and utterly confused. The tax powers within the assembly Bill represent the ability to vary taxation—nothing more, nothing less. Let us have none of the nonsense scare stories about corporation tax. For Conservative Members to say that there will always be an increase in taxation is a tacit admission that they will never again achieve power in Scotland. We understand why they take that view.
A Scottish assembly is not a panacea for the ills of Scotland. It is not some short-term solution to long-term infrastructure problems. But it would introduce a dynamism in Scotland and reform the structural, social, economic and cultural base. Such a base will provide an environment and an entity in which we can start to solve the long-term problems of Scotland.

Mr. Dennis Canavan: Earlier, the Secretary of State repeated his claim that there is little if any demand for devolution in Scotland. If he believes that, he must have his head in the sand. If he gets his head out of the sand, he will see that there is overwhelming demand for devolution in Scotland. If there is a lack of demand for anything among the people of Scotland, it is a lack of demand for the disastrous policies of the Tory Government, who were rejected by 76 per cent. of Scottish voters at the last general election. This Government can never, by any stretch of the imagination or by any definition of mandate, argue that they received a mandate from the people of Scotland.
When I put that point to her shortly after the general election, the Prime Minister reminded me that four out of the past five Labour Governments did not receive a majority of seats in England. Therefore, she said, by my logic, four out of the past five Labour Governments received no mandate to govern Britain. No party, potential Government or Government have ever sought or received a mandate for home rule for the people of England in the sense of setting up an all-England devolved assembly. If there were such a demand among the people of England, I would not stand in their way. I am grateful to my hon. Friends from the northern region of England for publishing their Bill to bring about an element of decentralisation for at least one region of England.
The situation in Scotland is quite clear. The negative side of the coin is that the Government were rejected by 76 per cent. of the people of Scotland. Therefore, they received no mandate from the people of Scotland. The positive side of the coin, as I said to the Secretary of State this afternoon, is that 76 per cent. of the people of Scotland voted for parties with a commitment to set up some form of Scottish assembly or Parliament.
How, then, can the Secretary of State continue to parrot the absurd claim that there is little if any demand for devolution in Scotland? He does not believe the result of the general election, in which he himself was a candidate and many of his former colleagues were failed candidates. The general election result is confirmed by opinion poll after an opinion poll showing a significant majority in favour of devolution. For example, the last System 3 opinion poll that was done for Channel 4 on the subject showed that a total of 76 per cent. of people in Scotland wanted some form of Scottish assembly or parliament. Sixty-two per cent. of the sample considered the matter to be either very important or quite important.
If the Secretary of State does not believe the general election result or the opinion polls, why is he afraid of having another referendum? His answer to me this afternoon was, "Well, we had one in 1979 and look at the result." I advise him that the 1979 referendum was nearly nine years ago and there has been a lot of water under the bridge since then and much damage done to the people of Scotland as a result of the Government who were elected in in 1979.
Let us look at that referendum result in 1979. Of those who took the trouble to turn out to vote, 52 per cent. voted in favour of a Scottish assembly and 48 per cent. voted against. Probably for the first time in British constitutional history, and probably in the constitutional histories of many countries, the majority of the people who turned out to vote for something were denied their democratic wish. Bearing in mind what has happened during the past nine years, I suggest that if we had another referendum now there would be a much bigger majority—an absolutely thumping majority — in favour of a devolved Scottish assembly or Parliament.
Among those who voted "yes" in the 1979 referendum was the Secretary of State. At that time I considered him a brave man because, from memory, I believe that he lost his shadow ministerial position and a great deal of favour among his own party for taking that courageous stance. However, his courage now seems sadly to have deserted him. He now seems to be putting his own political career and the interests of his party before the interests of his country. This is despite the signs that some people in his party are speaking out and taking actions which suggest not only a disillusionment with general Government policies, but also the desire for a greater say for the people of Scotland in the running of their own affairs.
Shortly after the general election, for example, the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith) had the courage to stand up and say, "Enough is enough: I am not joining this discredited Government," or words to that effect. I suggest that that was partly because of the way in which the needs of the people of Scotland have been ignored by the Government.
Last autumn, a leaked Tory party document suggested that some Tory activists, including some in the higher echelons of the party in Scotland, were in favour of some form of devolution. More recently, Michael Fry, a former Tory party parliamentary candidate, prepared a paper which was submitted to the Scottish Tory Constitutional Reform Group, calling for what even I would consider to be fairly radical proposals for setting up a Scottish assembly with economic powers, including taxation, as well as legislative powers.
Sadly, despite the fact that some Tory party members in Scotland are speaking out against Government policy in such matters, there has been no response so far from the Tory Government. That is part of the reason why the parliamentary Labour party, especially the Scottish group, has taken the initiative of introducing the Scotland Bill referred to in the motion. Basically we are proposing that the power of the Scottish Office, which is at present the subject of administrative devolution, should also be the subject of legislative devolution.
It is worth reminding hon. Members who represent English constituencies—some do not seem to realise this —of the plethora of powers of the Scottish Office in matters such as housing, health, education, public transport, agriculture, the provision of social work services for the elderly, sick and disabled and, indeed, aspects of industry and the economy.
At present, that machinery of government consists of 10,000 civil servants, who are headed by a Secretary of State and four assistant Ministers, whose party represents and received the support of less than one quarter of the people of Scotland. How on earth can we describe that as democracy? How on earth can we describe as democratic a system in which the hon. Member for Stirling (Mr. Forsyth) is part of the ministerial team? Having scraped home by the skin of his teeth in his own constituency he has found himself catapulted into being Minister for education, health, sport and the arts.
Is it any wonder that with people like that in charge — look at the team collectively and where they draw their support—we have such unpopular policies foisted undemocratically on the people of Scotland in matters such as housing, in which the Government are threatening to move back to the days of private landlordism; and in education, in which the Minister's proposals were recently rejected by teachers and parents?
There is also the poll tax, the iniquities of which are perceived by all the people of Scotland. We do not even need a debate in this place, or in the country, to convince the people of Scotland of the evils of the poll tax. Indeed, the people of Scotland, who are normally renowned for their discipline and obedience to law and order, are threatening a non-payment campaign throughout Scotland.
I do not suppose that anybody resorts to tactics of civil disobedience as a first resort. Certainly, from speaking to people in Scotland, I think that the majority would start on such a road with great reluctance. However, it is still a possibility. Therefore, I advise the Minister and his colleagues on the Government Front Bench that we are trying the parliamentary road by introducing the Bill. However, if the parliamentary road does not work because of the obstruction and intransigence of the Government, the Government risk a head-on constitutional clash.
I for one will do all that I can in this place, and outside this place, to provoke, and indeed encourage, a constitutional crisis, because I believe that my loyalty and the loyalty of any Member of Parliament ought to be not to this place—an institution of the British state—but to the people whom we represent. Until such time as the British constitution is successfully challenged and changed, this place will be incapable of responding to the legitimate needs and aspirations of the people of Scotland, including the necessary constitutional changes which involve setting up a Scottish assembly or Parliament.

Mrs. Maria Fyfe: I want to turn the attention of the House to an aspect of bringing about a Scottish assembly which has not had its attention during the many hours that we have spent discussing it. In many ways, the running of an assembly in Scotland could show this House some improved ways of conducting business. I am quite sure, for example, that when a Scottish assembly is formed, its Members will be full-time and will not be doing this work as a pastime for a gentleman. I am sure that the democratic attitudes of the people of Scotland would not tolerate such an approach to running the country.
A Scottish assembly might even keep sensible hours, and start work at the same time as everyone else. It strikes me as quite amusing that this House is referred to as the mother of Parliaments. If a real mother conducted herself as this Parliament does, she would come to the attention of the social workers, what with keeping her children up late at night and giving them access to food and drink in quantities that are bad for their systems.
One aspect of the Scottish assembly is the democratic participation of women in government. In all the years in which this House has existed, there have been only a handful of women Members, and only a tiny handful of those have been from Scotland. All the parties have something to be ashamed of in that respect. It so happens that I am only the tenth woman Member in the history of the Labour party in Scotland, and I can say freely that the other parties have a record even more susceptible of improvement.
It is not merely a matter of the House being such a gentlemen's club—or, perhaps, public school. It is not very feasible for a woman with family responsibilities to travel here from Scotland to be a Member of Parliament. That is simply not on for the vast majority of ordinary women who, unlike the Prime Minister, do not have nannies and home helps to leave them free to conduct business.
In a Scottish assembly, I would expect a much larger participation by women in the affairs of Scotland, and that could only be to the good. I am not arguing that because I believe that women are kinder or nicer. Anyone who thinks of the Prime Minister will know that that is not true. But it is the women who tend to go to the doctor when the kids are ill; it is the woman of the household who is likely to visit the local councillor if the drains need unblocking, or if she wants a transfer. Her husband's name may be on the tenancy certificate, but it is she who takes up the problems. When so much Scottish assembly business will relate to local government and the Health Service, I believe that women will express a strong wish to participate. When Labour brings forward its manifesto for the Scottish assembly, we shall make a strong point of our wish for a Ministry for women.

Mr. Bill Walker: The hon. Lady is labouring under a dreadful misapprehension. An assembly in Edinburgh will be just as difficult for someone representing, for instance, the Western Isles to attend as is Parliament in London. If the hon. Lady thinks that an assembly in Edinburgh will open up opportunities for women in far-flung constituencies, she is entirely wrong.

Mrs. Fyfe: I shall be brief, because one thing that women are taught is not to talk for too long. The hon.

Member for Tayside, North (Mr. Walker) is talking nonsense. Of course there are areas in Scotland from which it is difficult to travel to Edinburgh, but a Glaswegian, for example, can be in Edinburgh in an hour, whereas it takes three hours to get to London. That makes all the difference to someone who is trying to look after a family and a home. The lack of common sense among Conservative Members demonstrates — if nothing else does—how little they have to teach us about how to run an assembly, or anything else.
Another democratic aspect of the assembly will be that, instead of only attending occasional Scottish Questions in the House, Members of the assembly will find that they conduct the daily business. The Scottish people will be able to come into the public gallery every day and hear what the likes of Conservative Members in the House are saying. Conservative reputations should go down even further after that. Moreover, the press, and the media generally, will be able to pay close attention to all matters affecting Scotland.
I look forward to that day very much — if only because it will do a great deal for women in Scotland.

Dr. John Reid: The hon. Member for Darlington (Mr. Fallon) demeaned the debate, and, I think, some of the participants, by branding what we have heard today as micro-politicians talking about micro-politics. In all humility, I am prepared to consider myself a micro-politician. However, if that is the case, I wonder how we should brand my Tory opponent, who came 25,000 votes behind me in the last election.
To some extent, the debate has also been demeaned by a singular lack of attendance by Scottish Tory Members. While I appreciate that there is more chance of meeting Lord Lucan in the House than of meeting a Scottish Tory, I had thought that they might be able to muster slightly more than, on one occasion, one Scottish Member—the Minister.
Today's debate is about not only the good government of Scotland, but the better government of Britain. Like my hon. Friends, I should like to clarify at the outset the question raised by the hon. Member for Banff and Buchan (Mr. Salmond) and his colleagues in the Scottish National party about the mandate. I accept the constitutional mandate of the Government to govern the United Kingdom, because I accept the unity of the United Kingdom. However, people's lives are rarely ruled by the dry, dusty pages of constitutional textbooks. Their perceptions, feelings and support are far more firmly rooted in the reality of their everyday lives and, in particular, on whether they perceive that they are governed in a manner that is responsive to their needs and consistent with their priorities and aspirations. By that standard only a fool would claim — and the Secretary of State for Scotland, whatever else he may be, is no fool—that the Government have either a political or moral mandate to govern Scotland in the way in which they have been governing that sorry country.
That need not be the case. The Government could respond to the demand for greater self-government for Scotland. As we have stressed consistently throughout the debate, the Secretary of State in a previous political incarnation responded to that demand for devolution. Of course, he has now changed his mind. Burdened with promotion to high office, borne down with honours


bestowed on him by his leader and bought and sold for Treasury gold, he has sold out his conscience. He has turned his face against devolution and his back on the Scottish people and their demand for it.
In an almost bizarre refusal this afternoon to accept any of the volumes of objective evidence, the Secretary of State even refused to accept the fact that there might be a demand for devolution. He told us that the demand does not exist. He says: "It does not exist because I say it does not exist." He almost reminds me of the small boy running about telling every adult who will listen that he is not afraid of the bogy man. I must tell Conservative Members that this particular bogy man will not disappear, despite all the Secretary of State's scare stories. Indeed, the very volume of rumours, scare stories and propaganda emanating from the Scottish Office is the best testimony to the fact that the Secretary of State is only too well aware that the demand for devolution exists and is growing in Scotland.
Central to the propaganda is the contention that there is no demand for devolution. As I have said, that flies in the face of every known fact and every objective opinion poll. I raised the evidence from one opinion poll with the Secretary of State this afternoon, but he chose to ignore it. I referred to the Scottish assembly poll undertaken in 1987, the results of which correspond exactly with the System 3 poll referred to earlier by my hon. Friend the Member for Falkirk, West (Mr. Canavan). Question 6 of the Scottish assembly poll asked:
How will the Government's plans make life in Scotland?
In reply, 10 per cent. answered "better"; 27 per cent. answered "no different" and 61 per cent. said "worse". Question 7 asked:
Do you think that the Government cares about Scotland?

Mr. Ernie Ross: No.

Dr. Reid: In answer to that, 20 per cent. said "yes" and 80 per cent. agreed with my hon. Friend the Member for Dundee, West (Mr. Ross) and said "no". They believed that the Government would make things worse. So bereft are the Government of a response to those statistics that, if they are not actually lying, they are involved in the manufacture of malicious and inaccurate facts.

Mr. Salmond: Will the hon. Gentleman give way?

Dr. Reid: No; I do not have much time.
The biggest, most malicious and most inaccurate of those facts is the Government's claim that the devolution of power would necessarily and inevitably be accompanied by a whole battery of additional taxes. Ministers have constantly argued that, but when they are asked to come to the Dispatch Box and state one item within the devolution Bill that would affect taxes, other than the right to vary the rates of income tax, they singularly fail to come forward. [Interruption.] I have been listening very carefully to the debate. Unlike some Conservative Members, I have been here from the beginning of the debate, and I shall stay here to the end.
The absence of devolution has allowed the imposition on Scotland of a whole range of policies and measures that are completely alien to the values of our countrymen and women. The classic example is the poll tax. While I am on this subject, I repeat my challenge to the Minister to deny

the figures produced by the House of Commons Library, which show that within three years the poll tax, for an average family, will be running at £450 a head, which is equivalent to £2,000 per annum. I have repeatedly challenged the Government on that, but they have refused to answer. The poll tax and education have already been mentioned.
We now have a crisis in the National Health Service. A most devoted and committed work force has been brought out on strike at Hartswood hospital and others throughout Scotland. Why has a work force that is absolutely committed to the care of patients and that has never countenanced industrial action, a work force composed mainly of nurses and professionals who for 100 years eschewed militancy, been brought to what it considers to be extreme action? It is because we have been recruiting callous and indifferent people into the Health Service, or is it because they care a damn sight more about the Health Service than Ministers? It is easy for us to make up our minds about that.
We have heard tonight about what has been called "genuine" devolution. The Government do not want our form of devolution; they want genuine devolution. Yet the only example that they could clock up was a vote by 1,000 SSHA tenants at Castlemilk. If the Government think that that is such a good thing, why do they not instigate their brand of genuine devolution and give all SSHA tenants a chance to vote on whether they want the Scottish Homes document to go ahead? If the Government are prepared to meet that request, or that challenge, there may be something in genuine devolution.
The Health Service, education, local government and law — complete sections of Scottish life — have been misgoverned by the Conservative party, which does not, or will not, sympathise with or represent the wishes of the people of Scotland. That is why we have put the motion before Parliament tonight.
Devolution is not the shallow argument that the Government portray it to be. It has nothing to do with running away from nationalism. The fact is that, as the nationalist vote has steeply declined in Scotland, support for devolution has increased. As my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) said, a Scottish assembly would not be the panacea for all Scotland's ills. In itself, it would not be sufficient to save the steel industry and other industries in Scotland. We do not claim that a Scottish assembly will do everything, but because an assembly cannot do everything that does not mean that it cannot assist in many ways.
A Scottish assembly can assert a Scottish cultural and national identity. The values of Scottish people in some cases are markedly different from those of people in other parts of the country. That argument becomes stronger every day that the Government are in power. Since 1979, the north-south divide has caused unemployment in Scotland to increase by 105 per cent. Manufacturing output has fallen by 4·2 per cent. and total output has grown at an annual rate of only 1·3 per cent. compared with the national average of 2 per cent. In response to such statistics, and to the fact that the number of people living below the official poverty line in Scotland has increased by 140 per cent., the demand for devolution seems eminently sensible and reasonable.
The democratic road to devolution outlined in the Bill recognises the centuries of mutual dependence between the English and Scottish economies. That is why we are


arguing that the main levers of power should be retained at Westminister. The Government's dogmatic insistence on free-market policies has created one magic circle based in the south-east and an outer circle of poverty throughout Wales, the north of England and Scotland. The Government recognise that.
The wider implications are beginning to be seen. I welcome the new strident voices from the north of England, and later from Wales, demanding their own forms of decentralisation, because they have been marginalised for far too long in the politics of the Conservative party.
In my maiden speech I finished with a quote from the father of our party, Keir Hardie. He said that countries, like individuals, at some stages of their lives come to a crossroads, and woe betide them if they take the wrong path. In my maiden speech I pointed out that the road along which the Government were travelling was a far greater danger to the unity of the United Kingdom than any speeches that this micro-politician can make on this micro-political argument tonight. I give the same warning as other hon. Members have given. Pray that we are wrong. If hon. Members ignore the voices of rationality in the House, because they think that they are supporting the United Kingdom in all its unity, the irony is that it is they who will break up the unity of the United Kingdom.

Mr. John Maxton: The hon. Member for Tayside, North (Mr. Walker) and, I think, the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), suggested that the Scotland Bill was being introduced because we thought that we would never again gain power in Westminster; that we were seeking power in Scotland because Opposition Members saw themselves as Ministers only in that context.
It is interesting that the previous devolution Bill—this one is not that different — was introduced by a Labour Government. The previous Labour Government were prepared to give the people of Scotland their assembly; to give the people of Scotland the democracy that they still seek.
The chairman of the Conservative party in Scotland, Lord Goold, listened briefly to the debate. He did not stay long, and I am not surprised. He must have felt a great sense of despair as he listened to Conservative Members. The message that came through loud and clear from the Secretary of State and from every other Conservative Member was that the Tory party will never again manage to obtain a majority of parliamentary seats in Scotland. That is the assumption behind all that Conservative Members have said.
It is now assumed that the Labour party has always had a majority in Scotland, but that is not true. Since the second world war only one party has had a majority of votes in Scotland, and that is the Tory party. In almost every general election until 1970, the party with the majority of seats in Scotland was exactly the same as the party with the majority of seats in the United Kingdom. It is only in the last 18 years that there has been a divergence of political opinion within the United Kingdom.
At the end of the day, this debate is about democracy. The core of the debate is the Scottish people's demand for

a greater say within the United Kingdom and the demand that the parties—or party—for whom they vote should be allowed to administer and legislate for them.
Since 1979, the Scottish people have made it clear at every national and local election, and at nearly every by-election and in every opinion poll, that they want neither the narrow nationalism and cheap populism of the SNP, nor the free market philosphy and dictatorial centralism of the Tory party. The way in which the Secretary of State dismissed in a cavalier fashion yet again the Scottish people's demands is an insult to the House, and, more important, to the Scottish people.
I had written down that the Secretary of State made a clever speech. I have to say that it was not. It was probably the worst speech that I have ever heard him make. It was, as usual, slick, and there were a few cheap jibes, but it was all over the place. He had no rational arguments and his speech lacked intellectual honesty and analysis.
I am glad to see the right hon. and learned Gentleman coming into the Chamber. Anyone who has read his speeches in the devolution debate in the 1970s knows that he has never managed to convince us, and probably never even managed to convince himself, of the reasons why he threw the principles that he held then out of the window.
The only conclusion is that the right hon. and learned Gentleman knew that he would hold no office under the present Prime Minister while he remained a devolutionist, and high office — his car, his residence in Edinburgh castle, his Dover house appointment — is more important to him than the people of Scotland, whom supposedly he represents.
The first—and really the only—argument that the Secretary of State advanced against our Bill and devolution was that he believed there was no support for it in Scotland. Elections prove him wrong. The last general election proved him wrong, as we can see from a comparison between what happened in his constituency and what happened in mine. His majority went down, and mine went up by 7,000 on a pro-devolution stance.
If the Secretary of State genuinely believes that the people of Scotland do not want devolution, he should test the matter by putting it to a referendum. Let the people of Scotland speak. We on the Labour Benches will accept the decision of the referendum. If the people of Scotland say no to devolution, we will drop our devolution plans. The Secretary of State is far too much of a coward to go down that road.
The second argument is that the United Kingdom is a unitary state and that if we have a Scottish assembly the whole unitary state will fall apart. Many countries are not unitary; they are not unitary states in the sense of everything being controlled by one legislature and one Administration. There is no reason why we should not be the same.
What Conservative hon. Members are doing, for their own purposes, is to confuse "unitary" with "centralised". There is a very big difference. We believe in the unitary state; they believe in the centralised state.
Conservative hon. Members, including the Secretary of State, have not always held the view that devolution is wrong. During the 1970s—between 1974 and 1979—the right hon. and learned Gentleman stood firmly behind the manifesto on which the people of Edinburgh, Pentlands elected him. It was the other Tory hon. Members who became turncoats and refused to accept what they themselves believed in.
The October 1974 election manifesto is very dear to Conservative hon. Members, because it was the last manifesto, until June last year, in which they said they would abolish the rating system. They keep returning to that manifesto, saying, "That is why we have a mandate to get rid of the rating system." If it is true that they are using that manifesto to abolish the rates, they might use it for other purposes as well.
That United Kingdom manifesto said:
A recurring theme in our programme is the need to recognise that people want more freedom and more control over their own lives. This is what has shaped our policies for Scotland …
In Scotland we will: set up a Scottish Assembly; give the Secretary of State for Scotland, acting with the Scottish Assembly, the power to decide how to spend Scotland's share of the UK budget; establish"—
this makes nonsense of the Secretary of State's argument about taxation—
a Scottish Development Fund … to provide substantial help with both the new problems created by oil, and with Scotland's old deprived areas; transfer the Oil Division of the Department of Energy to Scotland.
Those ideas were amplified in the Scottish supplement to the manifesto. With regard to the assembly it said:
Devolution is our policy.
The word that the Secretary of State described as cold and unfeeling is the word that the Tory party used in its manifesto. It went on to say:
Devolution … can free Scotland from the frustrations of centralisation. Scottish Conservatives have a good record of devolution in the creation of departments at the Scottish Office free to take their own administrative decisions over a wide range of functions.
The Secretary of State may not like the last bit so much:
we have long recognised the need for matching devolution in the legislative and political field.
On the proposal for a Scottish development fund, the manifesto said:
Income from North sea oil will be used to create a Scottish development fund. This fund will be used to ensure that every part of Scotland derives the fullest benefit from oil.
It said that the fund would be used in oil areas to carry out essential infrastructural changes. It then said:
The fund will also be devoted to making good any damage to the Scottish countryside resulting from oil development. And it will make possible a major programme of renovation and replacement of out-of-date housing and obsolete industry.
When I read that passage to some of my colleagues recently, they suggested that it had been written, not by the Scottish Tories, but by Mr. Jim Sillars of the Scottish National party. It makes nonsense of the argument that Scotland cannot have its own finance. If the Secretary of State was prepared to say, "We will give them an assembly; it will not levy income tax, but it will have an oil development fund," I think that my hon. Friends might be prepared to accept that.
It is worth remembering that it was not only devolutionists such as the Secretary of State and the right hon. Member for Kincardine and Deeside (Mr. Buchanan-Smith) who stood at that election on that manifesto. So did the other four Members who were elected in 1974 and who are still on the Tory Benches. So did the hon. Member for Tayside, North. I accept that he did not win in Dundee, East, but he stood on the basis of that manifesto, as did the hon. Member for Galloway and Upper Nithsdale (Mr.

Lang), who stood in Glasgow, Pollok. So eight of the existing 10 Conservative Members in Scotland supported that manifesto in 1974.

Mr. Bill Walker: The hon. Gentleman should be aware that my position was the same as that of many members of his party at that time. I was opposed to devolution. I made that clear to the selection committee that selected me, and I stood on that platform. Of course, I did not get elected.

Mr. Maxton: That is the point. The hon. Member did not get elected.
Not only did the hon. Member for Tayside, North stand on the terms of that manifesto, but so did the right hon. Lady who is now Prime Minister of the United Kingdom. When she became leader of the Tory party in 1975, she was still supporting the policy of devolution. I understand that, in a speech in the city halls in Glasgow not long after she became Tory party leader, she said:
An assembly must be a top priority to ensure that more decisions affecting Scotland are taken in Scotland by Scotsmen.
Even in the referendum of 1979, of which so much has been made by the Tory party, the Tories refused to campaign against devolution. What they campaigned against was the Scotland Act 1978. They left their options open. In mid-February 1979, Lord Home said at Edinburgh university:
I should hesitate to vote no if I did not think that the parties will keep the devolution issue at the top of their priorities.
He went on to say that he would vote no because he wanted an assembly with tax powers, proportional representation and a well-defined formula for separating Scottish and English business.
To reinforce that view on the electorate of Scotland the Tory party chairman, Lord Thorneycroft, twisted the arm of BBC Scotland to reschedule its programmes to screen an interview with Lord Home two days before the referendum. Not only that, but on the eve of the poll the Prime Minister, who was then the Leader of the Opposition, put out a message through the press which started:
A No vote does not mean that the devolution question will be buried.
So there is no principle whatever in the argument that has been put up against devolution. It is pure political self-seeking. It is a refusal to give Scotland the voice that its people want. It acknowledges that the Tories know that they cannot win control of a Scottish assembly and that they do not want to see any part of the United Kingdom coming under the control of any other political party.
What is most worrying is the refusal to recognise Scottish nationality. There is a Scottish national feeling. We are all aware of it. We see it in sport, in the arts and culture and in the media. There is a recognition of Scotland as a separate, national part of the United Kingdom. Before Scottish National party members start jumping up and down, let me say that does not mean that although people feel that they are Scottish, they want to be part of an independent nation. They want to feel that their national identity is properly recognised within the United Kingdom and that they have a greater say over their own affairs.
We have devolution. It can be seen in the Secretary of State, his Ministers and the 95 per cent. of civil servants who operate in Scotland, not in England, at Westminster


or Whitehall. We deal with separate Scottish legislation in this place. We have a separate Scottish Administration. All this means that we have devolution. The Secretary of State is devolution. He is part and parcel of devolution, whether he likes it or not. When he introduces a Bill on education, he speaks as Secretary of State for Scotland, not as Secretary of State for Education. When he reforms Scottish law, he acts as Secretary of State for Scotland, not as Home Secretary. When he imposes privatisation on the Health Service, or imposes the poll tax on local government, it is on the Scottish Health Service and on Scottish local government that he imposes it. He, the Governmennt, the House of Commons and the constitution of the United Kingdom recognise that Scotland is entitled to its own legal system, education system, transport system and Health Service.
If we recognise the right to that level of self-government, it is patently absurd to make the contents of Scottish law dependent on English votes and to give control of the Scottish Office to a politician whose twin qualifications are that he represents a Scottish constituency and is acceptable to English Members, however unacceptable he is to the mass of his fellow Scots. That is the present situation.
If the Tories were honest in their denial of devolution, they would demand the abolition of the Scottish Office and the full integration of separate Scottish institutions into United Kingdom Government Departments. It is open to conjecture whether the Secretary of State would keep his place in the Cabinet. His three junior colleagues would disappear into the obscurity of the Back Benches from which they were plucked. They and all the other Scottish Tory Members would lose their seats at the next general election and the drive towards independence would be irresistible, but at least it would be an honest line to take. It is the present line of having, on the one hand, devolution and having, on the other hand, no legislative and democratic control over it that is so patently wrong and to which the Scottish people object.
I wish to give one short quotation in respect of the mandate argument:
I would never adopt the view that Scotland should be forced into the serfdom of socialism as a result of a vote in the House of Commons.
I have not heard a better argument for the mandate than that. That was Mr. Winston Churchill at the Usher hall in Edinburgh in 1950. I do not go as far as that. I do not claim that the Government do not have a mandate in the United Kingdom; they do, on matters relating to the United Kingdom. The Secretary of State for Scotland has no moral mandate in Scotland. That is where the mandate argument comes in.

Mr. Salmond: Will the hon. Gentleman give way?

Mr. Maxton: I shall not give way.
The Government's case is absurd and, unfortunately, very dangerous. They boast that they are the Unionists, but the Union is put at risk by their blind, stupid, stubborn refusal to accept the democratic rights of the Scottish people. The people of Scotland say, "We do not want to separate from the rest of the United Kingdom, but we want our national status to be recognised and we want to control our own affairs in our own way."
The Union between England and Scotland is like a marriage, freely entered into for the benefit of both partners. For most of the time since 1707 there has been

benefit for both sides. That has clearly been the case in Scotland, and England has not been out of line politically. Once one partner is not allowed to act freely within the marriage and one partner orders and instructs the other to do what he or she does not want to do, strains are placed on the marriage and divorce becomes a possibility. That is what we are facing in Scotland.
If the Government continue to act as they have done, they will put the union of the United Kingdom at risk. Except for the trivial trio of the Scottish National party, the Opposition do not wish that divorce to take place. We believe in the Union. We want to keep the United Kingdom together. If the Government constantly deny democracy to the Scottish people, resentment will rise. So far, it has not reached the point of demands that we separate, but if the Government continue down that road it will.
If English Members believe in democracy and the Union between Scotland and England, and if they who now object so much to the poll tax being imposed on their constituents accept that it should not be imposed on the people of Scotland either, I call on them to join us in the defence of the United Kingdom by joining us in the Division Lobby. If they do not, I assure them that they will not have heard the end of devolution. The Scottish people have a right to be heard. We will use all legitimate means to ensure that their voice is heard and their will carried out.

The Minister of State, Scottish Office (Mr. Ian Lang): The last remarks of the hon. Member for Glasgow, Cathcart (Mr. Maxton) came as a great disappointment to me. I had hoped that if the debate were to have any distinction, it might be the distinction of being the last that we would have on this subject. The play has been running a long time. It is time to ring down the curtain. It is taking on a certain period charm, but it is not filling the theatres. Before long, it will have to be relegated to the music hall.
What a changed climate has characterised our debate. What a contrast it is, as my hon. Friend the Member for Dumfries (Sir H. Monro) said, from the high days of summer when all the fresh-faced, new Labour Members strode into Westminster in the mistaken belief that Labour had won the election. They know differently now.

Ms. Hilary Armstrong: Will the hon. Gentleman give way?

Mr. Lang: If the hon. Lady will allow me, I shall press on. I have not said anything controversial so far.
Still Labour Members parade the unsustainable devolution case and offer the same wild assertions, the same weak arguments and the same woolly slogans. In every repetition, those arguments become less credible. I believe that Labour Members find them less and less convincing.
The speech of the hon. Member for Glasgow, Garscadden (Mr. Dewar) was distinctly defensive and edgy, possibly because he is used on these occasions to being wrongfooted by the Liberal party. This seems to happen increasingly to the official Opposition. Twice before Christmas, the Labour party was wrongfooted by the Liberals on devolution.
More interesting is the continuing evidence that emerges of the lack of enthusiasm in the Labour party for devolution. When we voted on the Scottish Parliament


Bill, introduced by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on 25 November, only 33 Scottish Labour Members and only 44 English Labour Members voted in support of it. I know that there are not many more than that among the English Labour party, but it does not show much enthusiasm.

Ms. Armstrong: The Minister does not seem to realise that there is a momentum for devolution not just in Scotland but throughout many English regions. Those of us from the northern region want to say to the Government that we believe in giving power to the regions and to all the people in England as well as in Scotland. How can the Minister say that the momentum is in the past? He has not been listening to what has been going on.

Mr. Lang: I can tell the hon. Lady about the views of English Labour Members from the regions. On 4 March 1986, the hon. Member for East Lothian (Mr. Home Robertson) introduced a ten-minute Bill to set up a Scottish assembly. The Bill was opposed not by a Conservative Member, but by the hon. Member for Jarrow (Mr. Dixon).
A year before that, on 5 March 1985, the hon. Member for Cathcart introduced a Bill very similar in purpose, and that was opposed, not by a Scottish Conservative Member, or even an English Conservative Member, but by the then hon. Member for City of Durham, Dr. Mark Hughes.
But perhaps they were following the guidance of the Leader of the Opposition, who, in 1978, said:
The irony of devolution is that it will smash beyond healing the unity of Britain … These devolution proposals offer a maximum of risk with a minimum of gain to the Scots people".
Opposition Members may say that this is history, but more recently the Leader of the Opposition reaffirmed those views, as reported in the South Wales Echo of 1 November 1985, when he said:
Devolution reform will not provide a factory, a machine or jobs.
It is no wonder that, when in the last general election campaign he came to Scotland, he preferred to talk about what he was pleased to call "the real issues" — health, education and jobs.
The hon. Member for Dunfermline, West (Mr. Douglas), in what I acknowledge was a sincere speech, was right when he conceded that devolution was not an issue at the 1987 election. Many of the opinion polls of that time prove him right. As he will know, an opinion poll published in The Scotsman of 13 March 1987 rated devolution as having 2 per cent. support as one of the most important election issues; by the election itself, a couple of months later, that 2 per cent. had increased to 4 per cent.
The hon. Member for Garscadden convened his great festival of democracy last autumn on Glasgow Green, which some 50,000 people were expected to attend, to celebrate the importance of devolution. In the event, 5,000 people turned up. That is the evidence of support for devolution in the country at large.
The Liberals at least have a measure of intellectual integrity in their arguments, which are smoother, slicker, better packaged — what one might call "designer devolution". They are also honest enough to concede the inevitable consequences of devolution — the disappearance of the Secretary of State and the resulting

reduction in the number of Members of Parliament at Westminster. They are honest, but not very responsible, because they argue for federalism, which, of course, provides the comfortable position that Liberals like of favouring something for which a theoretical case can be made but which nobody actually wants and which cannot, therefore, be introduced.
I disagree with proportional representation, and also with federalism, but the nonsense of proportional representation particularly undermines the Liberals. It is no accident that one Thomas Hare, who in 1857 devised one of the first PR schemes, gave his name to posterity with the word "hare-brained".
The hon. Member for Orkney and Shetland (Mr. Wallace) quoted Gladstone, but, of course, Gladstone was opposed to proportional representation. Lloyd George, the other great god of the Liberal party, denounced it as a device for defeating democracy. But when the hon. Gentleman complains about the absence of proportional representation because, in Labour's plans, there is no representation for rural areas and so the assembly would be dominated by Labour, I disagree with him because I believe that proportional representation is what breaks the territorial link and damages the representation of rural areas.
The kind of Scottish assembly proposed by the Labour party would be dominated by the central belt, and centralisation within Scotland could be every bit as damaging to the diverse interests of the Scottish people as any kind of centralisation at Westminster. That would be even more the case, when, as the Opposition propose, the assembly would be of the single-chamber kind and would carry with it the Labour party's commitment to abolish one tier of local government.
When we ponder the essence of the Labour party's policies, we must turn to the report of the debate on 23 November last year, when the hon. Member for Cathcart said:
Scotland is largely administered separately from the remainder of the United Kingdom. However, what Scotland does not have—and it is not the West Lothian question, or perhaps the Cathcart question; I do not care what it is called — is the bureaucratic structure required by that level of administrative devolution so that the views of the Scottish people can be represented and so that they can control their affairs."—[Official Report, 23 November 1987; Vol. 123, c.49.]
That is what it is all about — more bureaucracy. There can be no doubt at all that if the proposals of the hon. Member for Garscadden and his party were implemented, bureaucracy would be something that we would have in plenty. My reasons for opposing proportional representation are the same as my reasons for opposing the Labour party's Scottish assembly proposals. Proportional representation would destabilise the Government and weaken Westminster—the Parliament of the United Kingdom.
I raise the topic not to debate its merits in detail but because, as an issue, it reveals very clearly the motivation of the Labour party in bringing forward its proposals—it blows its cover. When, last November, my right hon. and learned Friend asked the hon. Member for Garscadden, if offered the choice between having no assembly and one based on proportional representation, which one he would choose, the hon. Gentleman would not answer the question. He said that it was a false choice and that once the Labour party had achieved an assembly the Scots


would consider the other matters involved. In other words, "Let us get Labour bottoms on to the leather benches of the Royal high school and then sort out the details."
Self-interest is the guiding principle behind the Scottish Labour party's conversion to devolution. The Labour party will support a Scottish assembly only if there is no proportional representation, and the Liberals will support it only if there is. So much for the high-principled concern for Scotland's interest.
A more important issue was raised in the debate, and it was recently introduced by the Labour party. It is one of the slightly newer ingredients of a tired old subject—taxation. In this regard, a dramatic extension of power is proposed in the Labour party's Scotland Bill. In the past, we argued that a Scottish assembly would leave us at the top of a slippery slope. We are no longer at the top of the slippery slope. With these new, stronger powers, we are already half way down it. Nothing could more clearly illustrate the way in which an assembly would go if it came into being.
Clause 11 of the Labour party's Scotland Bill includes a power to vary personal income tax. "Vary" is a very subtly chosen word, but "vary" equals "raise". The Labour party has opposed all our tax reductions over the past few years. Tax reductions are alien to the Labour party's philosophy. If it were to reduce taxation—let us give it the benefit of the doubt—there would be no gain to Scotland because the United Kingdom Chancellor recoups any reduction in taxation from the Scottish block. Indeed, the Bill provides for that. That would be inevitable. Otherwise the Scots would be asking the rest of the United Kingdom to pay for their self-voted tax reductions.
All that would be achieved is a switch of resources from the public to the private sector, which is not an obvious goal of Socialism. There would be a temptation for the United Kingdom Chancellor to reduce the Scottish block by the same percentage as any tax cut that the assembly might choose rather than by the cash amount. Thus, Scotland would be penalised. The benefits of any reduction in taxation by the assembly would be nonexistent for the Scottish people. The Scottish Chancellor would not be master in his own house. Scotland would be irresistibly linked to the decisions of Westminster.
Given all the cries of Labour Members for increased spending on housing, education, health and industrial assistance, what is obvious to everyone is that the purpose of clause 11 is to vary taxation upwards. Having taken the power, it is inconceivable that it would not be used. One has only to recall the Labour party's £28 billion-worth of promises of extra expenditure throughout the United Kingdom at the last election.
In that regard, we have the view of the right hon. Member for Leeds, East (Mr. Healey), a former Chancellor of the Exchequer. In the Glasgow Herald of 24 November 1986 he was quoted as saying:
We know in Scotland people will be willing to pay more for better services, and want the chance to pay more for the better services which the whole Tory approach to national government prevents them from doing.
That goes a long way to explaining his behaviour as Chancellor. It conjures up a remarkable picture of the Scots straining at the leash to pay more in taxation. Under these proposals, they would get their chance more than they know.
I am grateful for the intervention of the right hon. Member for Glasgow, Govan (Mr. Millan) at the beginning of the debate, which clarified the position. Clause 11 relates to personal income tax, not to corporate taxation.
The tax base in Scotland, for income tax only, in the last year for which figures are available, 1985–86—

Mr. John Home Robertson: What about the poll tax?

Mr. Lang: The hon. Gentleman should listen; he might find it quite informative.
In 1985–86, the tax base was £3·4 billion, but the spending on the block of the Secretary of State for Scotland was £6·5 billion. If, for example, the Opposition wanted to spend an extra 10 per cent. — a modest enough ambition—in Scotland, which is £650 million, the income tax that they would need to raise would be £650 million, but, because of the gearing effect, the tax would rise not by 10 per cent. but by 19 per cent.
That may sound bad enough, but what would happen if the United Kingdom were to decide to reassess Scotland's demands on the United Kingdom Treasury? After all, there would be no Secretary of State for Scotland and there would be fewer Scottish Members of Parliament to try to stop it. It would be reasonable to say that Scotland has its own differential tax-raising powers and therefore can decide its own level of differential help. People would ask why England should go on subsidising Scotland. Alternatively, the Chancellor might take a macro-economic view and, taking account of his obligations to control public expenditure, which has delivered such fine economic benefits, for every increase in taxation he might decide to reduce the Scottish block in proportion. [Interruption.] I know that Labour Members do not like this, because it undermines their case.
For every £1 spent in England, £1·22 is spent in Scotland. That is hardly neglect by a remote central Government. As the United Kingdom Chancellor evens out disparities and controls overall public spending, Scottish spending would have to rise by 20 per cent. just to stand still. To meet that, revenue from income tax would have to rise by 38 per cent. just to keep spending at the £6·5 billion level promulgated by the Opposition. If the Opposition sought to improve services on top of that, they would need a further increase of 19 per cent. in tax, giving a total increase of 57 per cent.
Let us suppose that we have got income tax down to 25p in the pound by then. A 57 per cent. increase would be 14p in the pound extra in income tax for Scotland, leading to an income tax level of 39p. [Interruption.] I know that Labour Members do not like it, but those, albeit rough and ready, assumptions leave the inescapable message that the Opposition have not thought out their tax proposals. They want to give up the best of both worlds in favour of the worst of both worlds. The central plank of their policy is one of muddle-headed, half-baked lunacy, which would ruin Scotland and its people.

Mr. Salmond: I compliment the Minister's researcher on having produced these ingenious arguments. My calculation would be that Scotland had a budget surplus of revenue over expenditure of about £3·5 billion. Can we not use some of those funds?

Mr. Lang: I understand that the hon. Gentleman used to work in a bank before he came here. He is not a very fine example of that bank if that is his view of the position.
We have said that business would suffer if the proposals were implemented, and the Opposition have criticised us on the grounds that the proposals affect income tax only. We know the cost of income tax increases. However, Opposition Members forget that people work in companies and demand pay rises, and they would want substantial increases to meet the kind of increased tax that they would be paying to a Scottish assembly. They might take industrial action to secure those pay rises, and that would lead to loss of competitiveness, loss of production and a brain drain from Scotland. It is self-evident that companies would not expand in Scotland if they had a choice of going to another, low-tax area.
The effect of inward investment, on which we have been so substantially successful as we have reduced taxation, would be devastating. We have brought over 300 companies into Scotland over the past seven or eight years, investing £1·6 billion in the Scottish economy and creating tens of thousands of jobs, but the need for greater enticements that would result from the Labour party policy of higher taxation of individuals, or the Liberal party's policy of slashing corporate tax and consequently also burdening individuals, is easy to predict. How long can we expect regional assistance to stay at the same favourable basis in Scotland after we had our own tax-raising powers? At the moment, we have 10 per cent. of the population, but 30 per cent. of the assistance. We would be on a vicious circle of industrial decline. It is no wonder —[Interruption.]

Mr. Speaker: Order. The hon. Member for Glasgow, Cathcart (Mr. Maxton) was listened to in silence. The same courtesy should be extended to the Minister.

Mr. Lang: It is no wonder that the business community in Scotland is united in opposition to the proposals. The chambers of commerce, the Confederation of British Industry, the Institute of Directors, the Scottish Financial Enterprise Group are all against it. I meet a large number of Scottish industrialists, and I have never yet met one who favours devolution of this kind.

Mr. Douglas: The Government have plans for changes in Scottish education, housing, industry and commerce and a whole range of other activities in Scotland. After this debate, we are entitled to know whether the Government have any plans whatever for changes in the constitutional relationship between Scotland and the rest of the United Kingdom.

Mr. Lang: I see nothing wrong with the present constitutional arrangements, which provide for the full, substantial and separate debate of Scottish legislative programmes in this Parliament. We are willing to improve the administration of Scotland in any way that can be achieved without undermining the integrity of the United Kingdom.
The hon. Member for Banff and Buchan (Mr. Salmond) said that devolution was necessary for Labour because it could never win power without it. However, one cannot help wondering why the Scottish National party supports devolution. Devolution is the very antithesis of separation, which is what SNP Members seek. The quintessence of genuine devolution is that it is within the

unity of a sovereign state. My hon. Friend the Member for Darlington (Mr. Fallon) was right to quote Mr. Enoch Powell who said that powers devolved are powers retained. The truth is that the SNP wants a Scottish assembly not for the better government of Scotland but for the more turbulent government of Scotland—as a springboard to separation. I would be more inclined to seek the advice of a fox on the design of a hen-run than to seek the advice of the SNP on the construction of an assembly.
My hon. Friend the Member for Darlington was right to say that real devolution is the kind of devolution that we have given to parents, home-owners, the self-employed, small businesses and the owners of shares in Scotland by cutting state ownership and control. That kind of dispersal of power around the people of this country is a worthwhile form of devolution.
The hon. Member for Fife, Central (Mr. McLeish) said that a unitary state can retain cohesion only if it recognises the diverse interests of all its constituent parts. I would say to him that a unitary state can survive only if it recognises, above all, the sovereignty of Parliament.

Mr. McLeish: No Opposition Member has questioned the sovereignty of Parliament. We are talking about bad government in Scotland and the fact that the Government are treating the people of Scotland with contempt. The unity of the United Kingdom could be under threat if that behaviour persists.

Mr. Lang: The hon. Gentleman does not understand that it is precisely the sovereignty of Parliament that would be most seriously undermined by the Labour party's proposals.
We rightly hear repeated reference to the unanswered West Lothian question: how does one justify Scottish Members of Parliament voting on English matters at Westminster while English Members cannot vote on such matters in Scotland? The Liberals and the Labour party both leave that question unanswered. However, it is still central to the debate, and to ignore it is the height of irresponsibility.
There is another question—the Westminster question. Do Labour Members believe in the sovereign Parliament of the United Kingdom? The self-deluding nonsense that we hear about their mandate and their claims that they won in Scotland suggest that they do not. They must choose. We know that Labour Governments have governed Britain without a majority in England. Members of the Labour party stood at the general election for election to this Westminster Parliament, and they lost. Scottish Labour Members must either accept the will of this Parliament and the right of this Government to govern or they must face the logic of their position and join the separatists. There is no middle ground.
The truth is that the Scotland Bill is not a principled measure of constitutional reform. It is about power; it is not about the better government of Scotland. One guiding principle underlies it—brazen self-interest. It is not good for Scotland; it is good for Labour. The Labour party seeks power at all costs and at any price. Labour has abandoned all hope of power in the United Kingdom, so Scottish Labour Members will settle for power in Scotland and dish their English colleagues into the bargain. Members of the Labour party in Scotland who won 70 per cent. of the seats on 42 per cent. of the vote were elected to this Parliament of the United Kingdom and they do not


command a majority here. I ask this Parliament to protect the unity of the United Kingdom and to protect the people of Scotland from these damaging and cynical proposals.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 226, Noes 316.

Division No. 155]
[10 pm


AYES


Abbott, Ms Diane
Fearn, Ronald


Adams, Allen (Paisley N)
Field, Frank (Birkenhead)


Allen, Graham
Fields, Terry (L'pool B G'n)


Alton, David
Fisher, Mark


Anderson, Donald
Flannery, Martin


Archer, Rt Hon Peter
Flynn, Paul


Armstrong, Ms Hilary
Forsythe, Clifford (Antrim S)


Ashdown, Paddy
Foster, Derek


Ashley, Rt Hon Jack
Foulkes, George


Banks, Tony (Newham NW)
Fraser, John


Barnes, Harry (Derbyshire NE)
Fyfe, Mrs Maria


Barnes, Mrs Rosie (Greenwich)
Galbraith, Samuel


Barron, Kevin
Galloway, George


Battle, John
Garrett, John (Norwich South)


Beckett, Margaret
George, Bruce


Beggs, Roy
Gilbert, Rt Hon Dr John


Beith, A. J.
Godman, Dr Norman A.


Benn, Rt Hon Tony
Golding, Mrs Llin


Bennett, A. F. (D'nt'n &amp; R'dish)
Grant, Bernie (Tottenham)


Bermingham, Gerald
Griffiths, Nigel (Edinburgh S)


Bidwell, Sydney
Griffiths, Win (Bridgend)


Blair, Tony
Grocott, Bruce


Blunkett, David
Harman, Ms Harriet


Boateng, Paul
Hattersley, Rt Hon Roy


Bray, Dr Jeremy
Haynes, Frank


Brown, Gordon (D'mline E)
Healey, Rt Hon Denis


Brown, Nicholas (Newcastle E)
Heffer, Eric S.


Brown, Ron (Edinburgh Leith)
Henderson, Douglas


Bruce, Malcolm (Gordon)
Hinchliffe, David


Buchan, Norman
Holland, Stuart


Buckley, George
Home Robertson, John


Caborn, Richard
Hood, James


Callaghan, Jim
Howarth, George (Knowsley N)


Campbell, Menzies (Fife NE)
Howell, Rt Hon D. (S'heath)


Campbell, Ron (Blyth Valley)
Howells, Geraint


Campbell-Savours, D. N.
Hoyle, Doug


Canavan, Dennis
Hughes, John (Coventry NE)


Carlile, Alex (Mont'g)
Hughes, Robert (Aberdeen N)


Clark, Dr David (S Shields)
Hughes, Roy (Newport E)


Clarke, Tom (Monklands W)
Hughes, Sean (Knowsley S)


Clay, Bob
Illsley, Eric


Clelland, David
Ingram, Adam


Clwyd, Mrs Ann
Janner, Greville


Cohen, Harry
John, Brynmor


Cook, Robin (Livingston)
Jones, Barry (Alyn &amp; Deeside)


Corbett, Robin
Jones, Ieuan (Ynys Môn)


Corbyn, Jeremy
Jones, Martyn (Clwyd S W)


Cousins, Jim
Kaufman, Rt Hon Gerald


Crowther, Stan
Kennedy, Charles


Cryer, Bob
Kilfedder, James


Cummings, J.
Kinnock, Rt Hon Neil


Cunliffe, Lawrence
Kirkwood, Archy


Cunningham, Dr John
Lamond, James


Darling, Alastair
Leadbitter, Ted


Davies, Rt Hon Denzil (Llanelli)
Leighton, Ron


Davies, Ron (Caerphilly)
Lewis, Terry


Davis, Terry (B'ham Hodge H'l)
Livsey, Richard


Dewar, Donald
Lloyd, Tony (Stretford)


Dixon, Don
Lofthouse, Geoffrey


Dobson, Frank
Loyden, Eddie


Doran, Frank
McAllion, John


Douglas, Dick
McAvoy, Tom


Dunnachie, James
McCartney, Ian


Dunwoody, Hon Mrs Gwyneth
Macdonald, Calum


Eadie, Alexander
McFall, John


Eastham, Ken
McKay, Allen (Penistone)


Evans, John (St Helens N)
McKelvey, William


Ewing, Mrs Margaret (Moray)
McLeish, Henry


Fatchett, Derek
McTaggart, Bob


Faulds, Andrew
McWilliam, John





Madden, Max
Rowlands, Ted


Mahon, Mrs Alice
Salmond, Alex


Marek, Dr John
Sedgemore, Brian


Marshall, Jim (Leicester S)
Sheerman, Barry


Martin, Michael (Springburn)
Sheldon, Rt Hon Robert


Martlew, Eric
Shore, Rt Hon Peter


Maxton, John
Short, Clare


Meacher, Michael
Skinner, Dennis


Meale, Alan
Smith, Andrew (Oxford E)


Michie, Bill (Sheffield Heeley)
Smith, C. (Isl'ton &amp; F'bury)


Michie, Mrs Ray (Arg'l &amp; Bute)
Smith, Rt Hon J. (Monk'ds E)


Millan, Rt Hon Bruce
Smyth, Rev Martin (Belfast S)


Mitchell, Austin (G't Grimsby)
Snape, Peter


Molyneaux, Rt Hon James
Soley, Clive


Moonie, Dr Lewis
Spearing, Nigel


Morgan, Rhodri
Steel, Rt Hon David


Morley, Elliott
Steinberg, Gerald


Morris, Rt Hon A (W'shawe)
Stott, Roger


Morris, Rt Hon J (Aberavon)
Strang, Gavin


Mowlam, Marjorie
Straw, Jack


Mullin, Chris
Taylor, Mrs Ann (Dewsbury)


Murphy, Paul
Taylor, Matthew (Truro)


Nellist, Dave
Thomas, Dafydd Elis


Oakes, Rt Hon Gordon
Turner, Dennis


O'Brien, William
Vaz, Keith


O'Neill, Martin
Wall, Pat


Orme, Rt Hon Stanley
Wallace, James


Patchett, Terry
Walley, Ms Joan


Pendry, Tom
Wardell, Gareth (Gower)


Pike, Peter
Wareing, Robert N.


Powell, Ray (Ogmore)
Welsh, Andrew (Angus E)


Prescott, John
Welsh, Michael (Doncaster N)


Primarolo, Ms Dawn
Wigley, Dafydd


Quin, Ms Joyce
Williams, Rt Hon A. J.


Radice, Giles
Williams, Alan W. (Carm'then)


Randall, Stuart
Wilson, Brian


Rees, Rt Hon Merlyn
Winnick, David


Reid, John
Wise, Mrs Audrey


Richardson, Ms Jo
Worthington, Anthony


Roberts, Allan (Bootle)
Wray, James


Robertson, George
Young, David (Bolton SE)


Rogers, Allan



Rooker, Jeff
Tellers for the Ayes:


Ross, Ernie (Dundee W)
Mr. Frank Cook and


Ross, William (Londonderry E)
Mr. Alun Michael.


NOES


Aitken, Jonathan
Braine, Rt Hon Sir Bernard


Alexander, Richard
Brandon-Bravo, Martin


Alison, Rt Hon Michael
Brazier, Julian


Allason, Rupert
Bright, Graham


Amery, Rt Hon Julian
Brittan, Rt Hon Leon


Amess, David
Brooke, Rt Hon Peter


Amos, Alan
Brown, Michael (Brigg &amp; Cl't's)


Arbuthnot, James
Browne, John (Winchester)


Arnold, Jacques (Gravesham)
Bruce, Ian (Dorset South)


Arnold, Tom (Hazel Grove)
Buck, Sir Antony


Ashby, David
Budgen, Nicholas


Aspinwall, Jack
Burns, Simon


Baker, Rt Hon K. (Mole Valley)
Burt, Alistair


Baldry, Tony
Butcher, John


Banks, Robert (Harrogate)
Butler, Chris


Beaumont-Dark, Anthony
Butterfill, John


Bellingham, Henry
Carlisle, John, (Luton N)


Bendall, Vivian
Carlisle, Kenneth (Lincoln)


Bennett, Nicholas (Pembroke)
Carrington, Matthew


Benyon, W.
Carttiss, Michael


Bevan, David Gilroy
Cash, William


Biffen, Rt Hon John
Channon, Rt Hon Paul


Biggs-Davison, Sir John
Chapman, Sydney


Blackburn, Dr John G.
Chope, Christopher


Blaker, Rt Hon Sir Peter
Churchill, Mr


Body, Sir Richard
Clark, Hon Alan (Plym'th S'n)


Bonsor, Sir Nicholas
Clark, Dr Michael (Rochford)


Boswell, Tim
Clark, Sir W. (Croydon S)


Bottomley, Peter
Clarke, Rt Hon K. (Rushcliffe)


Bottomley, Mrs Virginia
Colvin, Michael


Bowden, Gerald (Dulwich)
Coombs, Anthony (Wyre F'rest)


Bowis, John
Coombs, Simon (Swindon)


Boyson, Rt Hon Dr Sir Rhodes
Cope, John






Cormack, Patrick
Hunter, Andrew


Couchman, James
Hurd, Rt Hon Douglas


Cran, James
Irvine, Michael


Currie, Mrs Edwina
Irving, Charles


Curry, David
Jack, Michael


Davies, Q. (Stamf'd &amp; Spald'g)
Jackson, Robert


Davis, David (Boothferry)
Janman, Timothy


Day, Stephen
Jones, Gwilym (Cardiff N)


Devlin, Tim
Jones, Robert B (Herts W)


Dorrell, Stephen
Jopling, Rt Hon Michael


Douglas-Hamilton, Lord James
Kellett-Bowman, Dame Elaine


Dover, Den
Key, Robert


Dunn, Bob
King, Roger (B'ham N'thfield)


Durant, Tony
King, Rt Hon Tom (Bridgwater)


Dykes, Hugh
Kirkhope, Timothy


Eggar, Tim
Knapman, Roger


Emery, Sir Peter
Knight, Greg (Derby North)


Evans, David (Welwyn Hatf'd)
Knowles, Michael


Evennett, David
Lamont, Rt Hon Norman


Fairbairn, Nicholas
Lang, Ian


Fallon, Michael
Latham, Michael


Farr, Sir John
Lawrence, Ivan


Favell, Tony
Lee, John (Pendle)


Field, Barry (Isle of Wight)
Leigh, Edward (Gainsbor'gh)


Fookes, Miss Janet
Lennox-Boyd, Hon Mark


Forman, Nigel
Lester, Jim (Broxtowe)


Forsyth, Michael (Stirling)
Lightbown, David


Forth, Eric
Lilley, Peter


Fowler, Rt Hon Norman
Lloyd, Sir Ian (Havant)


Fox, Sir Marcus
Lloyd, Peter (Fareham)


Franks, Cecil
Luce, Rt Hon Richard


Freeman, Roger
McCrindle, Robert


French, Douglas
Macfarlane, Sir Neil


Gill, Christopher
MacKay, Andrew (E Berkshire)


Gilmour, Rt Hon Sir Ian
Maclean, David


Glyn, Dr Alan
McLoughlin, Patrick


Goodhart, Sir Philip
McNair-Wilson, M. (Newbury)


Goodlad, Alastair
McNair-Wilson, P. (New Forest)


Goodson-Wickes, Dr Charles
Major, Rt Hon John


Gorman, Mrs Teresa
Malins, Humfrey


Gorst, John
Mans, Keith


Gow, Ian
Maples, John


Gower, Sir Raymond
Marlow, Tony


Grant, Sir Anthony (CambsSW)
Marshall, John (Hendon S)


Greenway, Harry (Ealing N)
Martin, David (Portsmouth S)


Greenway, John (Rydale)
Mates, Michael


Gregory, Conal
Maude, Hon Francis


Griffiths, Peter (Portsmouth N)
Mawhinney, Dr Brian


Grist, Ian
Mayhew, Rt Hon Sir Patrick


Ground, Patrick
Mellor, David


Hamilton, Hon A. (Epsom)
Meyer, Sir Anthony


Hamilton, Neil (Tatton)
Miller, Hal


Hampson, Dr Keith
Mills, Iain


Hanley, Jeremy
Miscampbell, Norman


Hannam, John
Mitchell, Andrew (Gedling)


Hargreaves, A. (B'ham H'll Gr')
Mitchell, David (Hants NW)


Hargreaves, Ken (Hyndburn)
Moate, Roger


Harris, David
Monro, Sir Hector


Haselhurst, Alan
Montgomery, Sir Fergus


Hawkins, Christopher
Moore, Rt Hon John


Hayes, Jerry
Morrison, Hon Sir Charles


Hayhoe, Rt Hon Sir Barney
Moss, Malcolm


Hayward, Robert
Moynihan, Hon C.


Heathcoat-Amory, David
Mudd, David


Heddle, John
Needham, Richard


Heseltine, Rt Hon Michael
Nelson, Anthony


Hicks, Mrs Maureen (Wolv' NE)
Neubert, Michael


Higgins, Rt Hon Terence L.
Newton, Rt Hon Tony


Hind, Kenneth
Nicholls, Patrick


Hogg, Hon Douglas (Gr'th'm)
Nicholson, David (Taunton)


Holt, Richard
Nicholson, Miss E. (Devon W)


Hordern, Sir Peter
Onslow, Rt Hon Cranley


Howard, Michael
Oppenheim, Phillip


Howarth, Alan (Strat'd-on-A)
Page, Richard


Howarth, G. (Cannock &amp; B'wd)
Paice, James


Howe, Rt Hon Sir Geoffrey
Patnick, Irvine


Howell, Rt Hon David (G'dford)
Patten, John (Oxford W)


Hughes, Robert G. (Harrow W)
Pattie, Rt Hon Sir Geoffrey


Hunt, David (Wirral W)
Pawsey, James


Hunt, John (Ravensbourne)
Peacock, Mrs Elizabeth





Porter, Barry (Wirral S)
Stradling Thomas, Sir John


Porter, David (Waveney)
Sumberg, David


Portillo, Michael
Summerson, Hugo


Powell, William (Corby)
Tapsell, Sir Peter


Price, Sir David
Taylor, Ian (Esher)


Raffan, Keith
Taylor, John M (Solihull)


Raison, Rt Hon Timothy
Taylor, Teddy (S'end E)


Redwood, John
Tebbit, Rt Hon Norman


Renton, Tim
Temple-Morris, Peter


Rhodes James, Robert
Thatcher, Rt Hon Margaret


Rhys Williams, Sir Brandon
Thompson, D. (Calder Valley)


Riddick, Graham
Thompson, Patrick (Norwich N)


Ridley, Rt Hon Nicholas
Thorne, Neil


Ridsdale, Sir Julian
Thornton, Malcolm


Rifkind, Rt Hon Malcolm
Thurnham, Peter


Roberts, Wyn (Conwy)
Townend, John (Bridlington)


Roe, Mrs Marion
Townsend, Cyril D. (B'heath)


Rossi, Sir Hugh
Tracey, Richard


Rost, Peter
Tredinnick, David


Rowe, Andrew
Trippier, David


Rumbold, Mrs Angela
Trotter, Neville


Ryder, Richard
Twinn, Dr Ian


Sackville, Hon Tom
Waddington, Rt Hon David


Sainsbury, Hon Tim
Waldegrave, Hon William


Sayeed, Jonathan
Walden, George


Scott, Nicholas
Walker, Bill (T'side North)


Shaw, David (Dover)
Walker, Rt Hon P. (W'cester)


Shaw, Sir Giles (Pudsey)
Waller, Gary


Shaw, Sir Michael (Scarb')
Walters, Dennis


Shephard, Mrs G. (Norfolk SW)
Ward, John


Shepherd, Colin (Hereford)
Wardle, C. (Bexhill)


Shepherd, Richard (Aldridge)
Warren, Kenneth


Shersby, Michael
Watts, John


Sims, Roger
Wells, Bowen


Skeet, Sir Trevor
Wheeler, John


Smith, Tim (Beaconsfield)
Whitney, Ray


Soames, Hon Nicholas
Widdecombe, Miss Ann


Spicer, Sir Jim (Dorset W)
Wiggin, Jerry


Spicer, Michael (S Worcs)
Wilshire, David


Squire, Robin
Wolfson, Mark


Stanbrook, Ivor
Woodcock, Mike


Stanley, Rt Hon John
Yeo, Tim


Steen, Anthony
Young, Sir George (Acton)


Stern, Michael



Stevens, Lewis
Tellers for the Noes:


Stewart, Andrew (Sherwood)
Mr. Robert Boscawen and


Stewart, Ian (Hertfordshire N)
Mr. Tristan Garel-Jones.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on Amendments):—

The House divided: Ayes 310, Noes 227.

Division No. 156]
[10.15 pm


AYES


Aitken, Jonathan
Blackburn, Dr John G.


Alexander, Richard
Blaker, Rt Hon Sir Peter


Alison, Rt Hon Michael
Body, Sir Richard


Allason, Rupert
Bonsor, Sir Nicholas


Amery, Rt Hon Julian
Boswell, Tim


Amess, David
Bottomley, Peter


Amos, Alan
Bottomley, Mrs Virginia


Arbuthnot, James
Bowden, Gerald (Dulwich)


Arnold, Jacques (Gravesham)
Bowis, John


Arnold, Tom (Hazel Grove)
Boyson, Rt Hon Dr Sir Rhodes


Ashby, David
Braine, Rt Hon Sir Bernard


Aspinwall, Jack
Brandon-Bravo, Martin


Baker, Rt Hon K. (Mole Valley)
Brazier, Julian


Baldry, Tony
Bright, Graham


Beaumont-Dark, Anthony
Brittan, Rt Hon Leon


Bellingham, Henry
Brooke, Rt Hon Peter


Bendall, Vivian
Brown, Michael (Brigg &amp; Cl't's)


Bennett, Nicholas (Pembroke)
Browne, John (Winchester)


Benyon, W.
Bruce, Ian (Dorset South)


Bevan, David Gilroy
Buck, Sir Antony


Biffen, Rt Hon John
Budgen, Nicholas


Biggs-Davison, Sir John
Burns, Simon






Burt, Alistair
Hayes, Jerry


Butcher, John
Hayhoe, Rt Hon Sir Barney


Butler, Chris
Hayward, Robert


Butterfill, John
Heathcoat-Amory, David


Carlisle, John, (Luton N)
Heddle, John


Carlisle, Kenneth (Lincoln)
Heseltine, Rt Hon Michael


Carrington, Matthew
Hicks, Mrs Maureen (Wolv' NE)


Carttiss, Michael
Higgins, Rt Hon Terence L.


Cash, William
Hind, Kenneth


Channon, Rt Hon Paul
Hogg, Hon Douglas (Gr'th'm)


Chapman, Sydney
Holt, Richard


Chope, Christopher
Hordern, Sir Peter


Churchill, Mr
Howard, Michael


Clark, Hon Alan (Plym'th S'n)
Howarth, Alan (Strat'd-on-A)


Clark, Dr Michael (Rochford)
Howarth, G. (Cannock &amp; B'wd)


Clark, Sir W. (Croydon S)
Howe, Rt Hon Sir Geoffrey


Clarke, Rt Hon K. (Rushcliffe)
Howell, Rt Hon David (G'dford)


Coombs, Anthony (Wyre F'rest)
Hughes, Robert G. (Harrow W)


Coombs, Simon (Swindon)
Hunt, David (Wirral W)


Cope, John
Hunt, John (Ravensbourne)


Cormack, Patrick
Hunter, Andrew


Couchman, James
Hurd, Rt Hon Douglas


Cran, James
Irvine, Michael


Currie, Mrs Edwina
Irving, Charles


Curry, David
Jack, Michael


Davies, Q. (Stamt'd &amp; Spald'g)
Jackson, Robert


Davis, David (Boothferry)
Janman, Timothy


Day, Stephen
Jones, Gwilym (Cardiff N)


Devlin, Tim
Jones, Robert B (Herts W)


Dorrell, Stephen
Jopling, Rt Hon Michael


Douglas-Hamilton, Lord James
Kellett-Bowman, Dame Elaine


Dover, Den
Key, Robert


Dunn, Bob
King, Roger (B'ham N'thfield)


Durant, Tony
King, Rt Hon Tom (Bridgwater)


Dykes, Hugh
Kirkhope, Timothy


Eggar, Tim
Knapman, Roger


Emery, Sir Peter
Knight, Greg (Derby North)


Evans, David (Welwyn Hatf'd)
Knowles, Michael


Evennett, David
Lamont, Rt Hon Norman


Fairbairn, Nicholas
Lang, Ian


Fallon, Michael
Latham, Michael


Farr, Sir John
Lawrence, Ivan


Favell, Tony
Lee, John (Pendle)


Field, Barry (Isle of Wight)
Leigh, Edward (Gainsbor'gh)


Fookes, Miss Janet
Lennox-Boyd, Hon Mark


Forman, Nigel
Lester, Jim (Broxtowe)


Forsyth, Michael (Stirling)
Lightbown, David


Forth, Eric
Lilley, Peter


Fowler, Rt Hon Norman
Lloyd, Sir Ian (Havant)


Fox, Sir Marcus
Lloyd, Peter (Fareham)


Franks, Cecil
Luce, Rt Hon Richard


Freeman, Roger
McCrindle, Robert


French, Douglas
Macfarlane, Sir Neil


Gill, Christopher
MacKay, Andrew (E Berkshire)


Gilmour, Rt Hon Sir Ian
Maclean, David


Glyn, Dr Alan
McLoughlin, Patrick


Goodhart, Sir Philip
McNair-Wilson, M. (Newbury)


Goodlad, Alastair
McNair-Wilson, P. (New Forest)


Goodson-Wickes, Dr Charles
Major, Rt Hon John


Gorman, Mrs Teresa
Malins, Humfrey


Gorst, John
Mans, Keith


Gow, Ian
Maples, John


Gower, Sir Raymond
Marlow, Tony


Grant, Sir Anthony (CambsSW)
Marshall, John (Hendon S)


Greenway, Harry (Ealing N)
Martin, David (Portsmouth S)


Greenway, John (Rydale)
Mates, Michael


Gregory, Conal
Maude, Hon Francis


Griffiths, Peter (Portsmouth N)
Mawhinney, Dr Brian


Grist, Ian
Mayhew, Rt Hon Sir Patrick


Ground, Patrick
Mellor, David


Hamilton, Hon A. (Epsom)
Meyer, Sir Anthony


Hamilton, Neil (Tatton)
Miller, Hal


Hampson, Dr Keith
Mills, Iain


Hanley, Jeremy
Miscampbell, Norman


Hannam, John
Mitchell, Andrew (Gedling)


Hargreaves, A. (B'ham H'll Gr')
Mitchell, David (Hants NW)


Hargreaves, Ken (Hyndburn)
Moate, Roger


Harris, David
Monro, Sir Hector


Haselhurst, Alan
Montgomery, Sir Fergus


Hawkins, Christopher
Moore, Rt Hon John





Morrison, Hon Sir Charles
Spicer, Sir Jim (Dorset W)


Moss, Malcolm
Spicer, Michael (S Worcs)


Moynihan, Hon C.
Squire, Robin


Mudd, David
Stanbrook, Ivor


Needham, Richard
Stanley, Rt Hon John


Nelson, Anthony
Stern, Michael


Neubert, Michael
Stevens, Lewis


Newton, Rt Hon Tony
Stewart, Andrew (Sherwood)


Nicholls, Patrick
Stewart, Ian (Hertfordshire N)


Nicholson, David (Taunton)
Stradling Thomas, Sir John


Nicholson, Miss E. (Devon W)
Sumberg, David


Onslow, Rt Hon Cranley
Summerson, Hugo


Oppenheim, Phillip
Tapsell, Sir Peter


Page, Richard
Taylor, Ian (Esher)


Paice, James
Taylor, John M (Solihull)


Patnick, Irvine
Taylor, Teddy (S'end E)


Patten, John (Oxford W)
Tebbit, Rt Hon Norman


Pattie, Rt Hon Sir Geoffrey
Temple-Morris, Peter


Pawsey, James
Thatcher, Rt Hon Margaret


Peacock, Mrs Elizabeth
Thompson, D. (Calder Valley)


Porter, Barry (Wirral S)
Thompson, Patrick (Norwich N)


Porter, David (Waveney)
Thorne, Neil


Portillo, Michael
Thornton, Malcolm


Powell, William (Corby)
Thurnham, Peter


Price, Sir David
Townend, John (Bridlington)


Raffan, Keith
Townsend, Cyril D. (B'heath)


Raison, Rt Hon Timothy
Tracey, Richard


Redwood, John
Tredinnick, David


Renton, Tim
Trippier, David


Rhodes James, Robert
Trotter, Neville


Rhys Williams, Sir Brandon
Twinn, Dr Ian


Riddick, Graham
Waddington, Rt Hon David


Ridley, Rt Hon Nicholas
Waldegrave, Hon William


Ridsdale, Sir Julian
Walden, George


Rifkind, Rt Hon Malcolm
Walker, Bill (T'side North)


Roberts, Wyn (Conwy)
Walker, Rt Hon P. (W'cester)


Roe, Mrs Marion
Waller, Gary


Rossi, Sir Hugh
Walters, Dennis


Rost, Peter
Ward, John


Rowe, Andrew
Wardle, C. (Bexhill)


Rumbold, Mrs Angela
Warren, Kenneth


Ryder, Richard
Watts, John


Sackville, Hon Tom
Wells, Bowen


Sainsbury, Hon Tim
Wheeler, John


Sayeed, Jonathan
Whitney, Ray


Shaw, David (Dover)
Widdecombe, Miss Ann


Shaw, Sir Giles (Pudsey)
Wilshire, David


Shaw, Sir Michael (Scarb')
Wolfson, Mark


Shephard, Mrs G. (Norfolk SW)
Woodcock, Mike


Shepherd, Colin (Hereford)
Yeo, Tim


Shepherd, Richard (Aldridge)
Young, Sir George (Acton)


Shersby, Michael



Sims, Roger
Tellers for the Ayes:


Skeet, Sir Trevor
Mr. Robert Boscawcn and


Smith, Tim (Beaconsfield)
Mr. Tristan Garel-Jones.


Soames, Hon Nicholas



NOES


Abbott, Ms Diane
Blunkett, David


Adams, Allen (Paisley N)
Boateng, Paul


Allen, Graham
Bray, Dr Jeremy


Alton, David
Brown, Gordon (D'mline E)


Anderson, Donald
Brown, Nicholas (Newcastle E)


Archer, Rt Hon Peter
Brown, Ron (Edinburgh Leith)


Armstrong, Ms Hilary
Bruce, Malcolm (Gordon)


Ashdown, Paddy
Buchan, Norman


Ashley, Rt Hon Jack
Buckley, George


Banks, Tony (Newham NW)
Caborn, Richard


Barnes, Harry (Derbyshire NE)
Callaghan, Jim


Barnes, Mrs Rosie (Greenwich)
Campbell, Menzies (Fife NE)


Barron, Kevin
Campbell, Ron (Blyth Valley)


Battle, John
Campbell-Savours, D. N.


Beckett, Margaret
Canavan, Dennis


Beggs, Roy
Carlile, Alex (Mont'g)


Beith, A. J.
Clark, Dr David (S Shields)


Benn, Rt Hon Tony
Clarke, Tom (Monklands W)


Bennett, A. F. (D'nt'n &amp; R'dish)
Clay, Bob


Bermingham, Gerald
Clelland, David


Bidwell, Sydney
Clwyd, Mrs Ann


Blair, Tony
Cohen, Harry






Cook, Robin (Livingston)
Hood, James


Corbett, Robin
Howarth, George (Knowsley N)


Corbyn, Jeremy
Howell, Rt Hon D. (S'heath)


Cousins, Jim
Howells, Geraint


Crowther, Stan
Hoyle, Doug


Cryer, Bob
Hughes, John (Coventry NE)


Cummings, J.
Hughes, Robert (Aberdeen N)


Cunliffe, Lawrence
Hughes, Roy (Newport E)


Cunningham, Dr John
Hughes, Sean (Knowsley S)


Darling, Alastair
Hughes, Simon (Southwark)


Davies, Rt Hon Denzil (Llanelli)
Illsley, Eric


Davies, Ron (Caerphilly)
Ingram, Adam


Davis, Terry (B'ham Hodge H'l)
Janner, Greville


Dewar, Donald
John, Brynmor


Dixon, Don
Jones, Barry (Alyn &amp; Deeside)


Dobson, Frank
Jones, Ieuan (Ynys Môn)


Doran, Frank
Jones, Martyn (Clwyd S W)


Douglas, Dick
Kaufman, Rt Hon Gerald


Dunnachie, James
Kennedy, Charles


Dunwoody, Hon Mrs Gwyneth
Kilfedder, James


Eadie, Alexander
Kinnock, Rt Hon Neil


Eastham, Ken
Kirkwood, Archy


Evans, John (St Helens N)
Lamond, James


Ewing, Mrs Margaret (Moray)
Leadbitter, Ted


Fatchett, Derek
Leighton, Ron


Faulds, Andrew
Lewis, Terry


Fearn, Ronald
Livsey, Richard


Field, Frank (Birkenhead)
Lloyd, Tony (Stretford)


Fields, Terry (L'pool B G'n)
Lofthouse, Geoffrey


Fisher, Mark
Loyden, Eddie


Flannery, Martin
McAllion, John


Flynn, Paul
McAvoy, Tom


Forsythe, Clifford (Antrim S)
McCartney, Ian


Foster, Derek
Macdonald, Calum


Foulkes, George
McFall, John


Fraser, John
McKay, Allen (Penistone)


Fyfe, Mrs Maria
McKelvey, William


Galbraith, Samuel
McLeish, Henry


Galloway, George
McTaggart, Bob


Garrett, John (Norwich South)
McWilliam, John


George, Bruce
Madden, Max


Gilbert, Rt Hon Dr John
Mahon, Mrs Alice


Godman, Dr Norman A.
Marek, Dr John


Golding, Mrs Llin
Marshall, Jim (Leicester S)


Grant, Bernie (Tottenham)
Martin, Michael (Springburn)


Griffiths, Nigel (Edinburgh S)
Martlew, Eric


Griffiths, Win (Bridgend)
Maxton, John


Grocott, Bruce
Meacher, Michael


Harman, Ms Harriet
Meale, Alan


Hattersley, Rt Hon Roy
Michie, Bill (Sheffield Heeley)


Haynes, Frank
Michie, Mrs Ray (Arg'l &amp; Bute)


Healey, Rt Hon Denis
Millan, Rt Hon Bruce


Heffer, Eric S.
Mitchell, Austin (G't Grimsby)


Henderson, Douglas
Molyneaux, Rt Hon James


Hinchliffe, David
Moonie, Dr Lewis


Holland, Stuart
Morgan, Rhodri


Home Robertson, John
Morley, Elliott





Morris, Rt Hon A (W'shawe)
Smith, C. (Isl'ton &amp; F'bury)


Morris, Rt Hon J (Aberavon)
Smith, Rt Hon J. (Monk'ds E)


Mowlam, Marjorie
Smyth, Rev Martin (Belfast S)


Mullin, Chris
Snape, Peter


Murphy, Paul
Soley, Clive


Nellist, Dave
Spearing, Nigel


Oakes, Rt Hon Gordon
Steel, Rt Hon David


O'Brien, William
Steinberg, Gerald


O'Neill, Martin
Stott, Roger


Orme, Rt Hon Stanley
Strang, Gavin


Patchett, Terry
Straw, Jack


Pendry, Tom
Taylor, Mrs Ann (Dewsbury)


Pike, Peter
Taylor, Matthew (Truro)


Powell, Ray (Ogmore)
Thomas, Dafydd Elis


Prescott, John
Turner, Dennis


Primarolo, Ms Dawn
Vaz, Keith


Quin, Ms Joyce
Wall, Pat


Radice, Giles
Wallace, James


Randall, Stuart
Walley, Ms Joan


Rees, Rt Hon Merlyn
Wardell, Gareth (Gower)


Reid, John
Wareing, Robert N.


Richardson, Ms Jo
Welsh, Andrew (Angus E)


Roberts, Allan (Bootle)
Welsh, Michael (Doncaster N)


Robertson, George
Wigley, Dafydd


Rogers, Allan
Williams, Rt Hon A. J.


Rooker, Jeff
Williams, Alan W. (Carm'then)


Ross, Ernie (Dundee W)
Wilson, Brian


Ross, William (Londonderry E)
Winnick, David


Rowlands, Ted
Wise, Mrs Audrey


Salmond, Alex
Worthington, Anthony


Sedgemore, Brian
Wray, James


Sheerman, Barry
Young, David (Bolton SE)


Sheldon, Rt Hon Robert



Shore, Rt Hon Peter
Tellers for the Noes:


Short, Clare
Mr. Frank Cook and


Skinner, Dennis
Mr. A. W. Michael.


Smith, Andrew (Oxford E)

Question accordingly agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House rejects the arguments for constitutional change that would be disruptive, unworkable, costly to implement and destabilising in their effect; and in particular rejects the added tax burden that would fall on the people of Scotland from a Scottish Assembly with tax-raising powers.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Income and Corporation Taxes Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Garel-Jones.]

Immigration Rules

Mr. Roy Hattersley: I beg to move,
That the Statement of Changes in Immigration Rules (HC 1987–88, No. 208), a copy of which was laid before this House on 14th December 1987, be disapproved.
We tabled the motion opposing the rules for reasons which I shall describe as briefly as possible in the restricted time at my disposal. I know very well that the Government have promised that in the not-too-distant future there will be a debate on the rules, which will enable the House to discuss the procedures in general and the changes before the House tonight, which must be approved by the House if they are to be in place by 1 February and therefore passed into administrative law. But we wished to take the opportunity of debating the proposed changes tonight because it seemed to us that every opportunity should be seized to deal with something that is wrong in principle and in our judgment will be catastrophic in practice.
I have no doubt that the Minister of State will describe the changes proposed by the Government almost entirely in administrative terms, and suggest, as the Home Secretary suggested at the beginning of his speech on Second Reading of the Immigration Bill, that the only purpose and intention of the changes is to improve the administrative efficiency of immigration control.

Mr. Jeremy Hanley: Will the right hon. Gentleman say whether more people will benefit or more will suffer by the rules?

Mr. Hattersley: My entire speech will be devoted to the proposition that more people will suffer than will benefit.
I was delighted to give way to the hon. Gentleman, because I had hoped I would have an opportunity to remind him that last time we debated these matters, after much passing of notes from the Front Bench, he announced, reading the Minister of State's note, that the primary purpose rule, as at present constituted, was invented by the Labour Government. I hope that the hon. Gentleman has had the opportunity to check up on that, and that he will correct himself during the evening.
I was saying that the Minister of State will no doubt argue, as the Home Secretary argued, when he dealt with this subject, slightly inappropriately, on the Immigration Bill, that the purpose of these administrative changes is to improve the efficiency of the immigration and nationality department of the Home Office. No Opposition hon. Member, certainly nobody who deals with immigration matters in his or her constituency, doubts that there is a desperate necessity for administrative changes in the Home Office.
The fact is that the immigration and nationality department of the Home Office is in absolute chaos. Men and women who do no more than to apply to exercise their legal rights wait for months, sometimes years, to receive the vouchers and the visas which should be theirs automatically. Letters remain unopened in Lunar house for months. Indeed, checking up today I discovered that, on the latest information, in late December the department was opening—not reading, but opening—letters received during the early weeks of October. That is ludicrous. It is

within the experience of all hon. Members who deal with such questions that people who want and need immediate attention from the Home Office are unable to obtain it.
The absurdity to end all absurdities is that many visitors to this country who want to leave at the end of their prescribed period are now unable to do so because the Home Office has their passports; they are lost at Lunar house and the Home Office cannot return them in time for the visitors to leave by the prescribed date.
In fact, the Home Office immigration and nationality department is in a shambles, for reasons for which the Government are largely responsible. Over the past eight years, this Government have complicated and extended the immigration rules. Over the past eight years, they have allowed to exist a shortage of staff in the department, which has made the delays and the late replies inevitable. Over the past eight years, the Government have built up a number of extra barriers outside the official regulations, which are in themselves time-consuming.
I give as my example the third and fourth interview. Everybody with immigrants in his or her constituency will have seen applications from genuine husbands and fiancés to join their wife or fiancee in this country, in response to which there has been a letter from the Home Office saying that an interview is necessary. When the applicants have written to the Home Office and said that there has been an interview, they have been told that a second or a third interview is necessary. Everybody knows that those extended interviews are intended to inhibit and deter legitimate immigrants from entering this country.
The position is further complicated by the subjective tests that the Government have invented. The family admitted for settlement, after careful scrutiny by an embassy or a high commission abroad, is required to submit itself to futher scrutiny after a year in Britain. That is intolerable in terms of civil rights and is an additional burden for the Home Office. Most of all, there is the problem of the primary purpose rule, to which I shall return in a moment.
Most of the administrative hurdles which have caused the chaos were created with the specific intention of inhibiting and curtailing legitimate and legal immigration. The immigration and nationality department of the Home Office and the administration of immigration will remain in chaos until the Government change their ways.
The proposals before us barely touch the problem. What is more, they could be —and I fear, with this Government's record, will be — interpreted in a way which further damages the rights of immigrants, prospective immigrants and the families of immigrants. That is only one reason why we shall vote against the proposal tonight.
We will also vote against the immigration rules, and amendments to them, whenever there is an opportunity for as long as they contain the unacceptable features which characterise them. I give as the obvious example the primary purpose rule — the obligation on the man or woman who wishes to come to this country for marriage to accept the onus of proof that the marriage is the primary, indeed the only, purpose of the application to come into the country. That rule discriminates against the black and Asian British. It disrupts and destroys genuine marriages, and it panders, as it is intended to do, to racial prejudice. The Minister of State should tell the Home


Secretary that we will take every opportunity—tonight is one opportunity — to demonstrate our distaste for such rules while they remain in force.
The rules were instituted with the idea of delaying immigration. The regulations place an obligation on a junior civil servant to read the mind of a fiancé and on someone in a high commission or an embassy to try to guess the true intention of an applicant. All these things cause delay and chaos.
The vote tonight is meant to send a second message to the Government. We will not accept the exclusion of Members of Parliament from the consideration of immigration applications by constituents. The Minister of State has developed the habit, in his bland way, of saying in the final sentence of his letter to hon. Members about legitimate cases that he will notify the constituent direct when he has made up his mind about that person's future. That is meant to prevent the Member of Parliament from fulfilling his or her proper function of arguing the case of the constituent. The intention is to remove from the Member of Parliament the right to protect his or her constituent.
Now that the Home Secretary has replied to my complaint on the matter, 12 weeks after receiving my original letter, I want to tell the Minister of State that those of us with constituency cases to argue on the immigration rules will go on arguing them; we will not abandon the rights of our constituents to junior officials at the Home Office, and certainly not to the Minister of State.
I welcome the fact that we are to debate the rules in their entirety next month. As for the specific changes that the Minister of State will put forward, I have nothing to say about au pairs, although I suspect that the Minister may feel that it is a subject worthy of his attention. I will not argue with him about that. The proposal for fiancés is sensible. We welcome it. I hope that it will be implemented in the spirit in which the rules are drafted.
We are told that visitors will normally be allowed to remain in this country for six months, as distinct from what happens under the present rule, which allows— some White Papers imply that it is a normal rule—for a year. In fact, the six-month period in the new regulations is more or less what the present rule says. A period of six months will "normally be appropriate." The present rule says that that is the period that should be granted and normally it will not be reduced below six months, unless there is a special reason. In the experience of many Opposition Members, there are innumerable special reasons for visitors which result in visas or permits being granted for less than six months. One special reason which I encounter every Saturday morning is that the visitor comes from Bangladesh, Pakistan or India.
I want the Minister of State to be categoric. He has seen the tables; he knows the figures. He knows that a visitor from Bangladesh has a worse chance of getting a visa, permit or entry voucher than a visitor from any other country. He knows that it is almost as bad for people from Pakistan and that it is nearly as bad for those from India. I want the Minister to tell us categorically whether the Government mean what the regulations say.
Can we be told, clearly and loudly enough for the immigration officers to hear and understand, that six months will he the general rule for all legitimate visitors? To convince us that that is really his intention, and that

it is not his intention to reduce the maximum period and then issue visas for much shorter periods within the six-month maximum, will the Minister of State consider publishing the instructions which he will issue to immigration officers telling them now to apply the six-month rule?
Those of us who have dealt with the Department and have telephoned and argued with duty officers on Saturdays and Sundays know that there is something called the code 3 procedure. It is a technique by which immigration officers who have no evidence which justifies the exclusion of a visitor or the limiting of a visitor's permit impose a limitation because they feel uncertain about the visitor. That is absolutely unacceptable and intolerable. I hope that the Minister will make it clear that the six months is the six-month norm, the six-month rule, and that six months will be the period allowed except when there is hard evidence to justify an alternative.

Mr. John Carlisle: Will the right hon. Gentleman explain exactly what he means by a legitimate visitor?

Mr. Hattersley: It is a visitor against whom there is no evidence to suggest that he or she will not leave at the end of the period of his or her visit. I think that I have in my constituency probably 20, 30 or 40 applications a month for a visitor's permit. Some are granted willingly by the Home Office, some are granted grudgingly after intervention, and a few are not granted at all. I cannot recall the last occasion when the Home Office wrote to me and said that a legitimate visitor, approved after my intervention, had remained in the United Kingdom longer than the period of his or her visit; yet the rumour—I am sure that the hon. Member for Luton, North (Mr. Carlisle) has spread it in his time—is that visitors come here and disappear into the inner cities. I cannot recall when that last happened in Birmingham.

Mr. Carlisle: Would the right hon. Gentleman therefore say that his judgment on legitimacy is to be followed rather than the judgment of Home Office officials or Home Office Ministers?

Mr. Hattersley: The rule which I want to see applied is that a visitor should be allowed into this country for the six-month period unless there is hard evidence to demonstrate why that should not happen. The hon. Gentleman should support that rule because, if a white South African comes here, that is exactly the rule that will be applied to him. Unfortunately, it is not the rule that will be applied to a citizen of Pakistan, India or Bangladesh.
It is our view, as I think it is of everyone who has examined the proposals, that this will not end the administrative chaos in the Home Office. That will only come about by radical changes which, in the interests of the immigration and nationality department's reputation and in the interests of prospective immigrants and their families, ought to be brought about. I offer the Minister of State four proposals for change which would end the backlog, the waiting, the unopened letters and the chaos.
First, there ought to be an independent inquiry into the administration of the department and into the staff levels of the Home Office where immigration matters are considered. I concede that the Rayner inquiry into some aspects of Government efficiency brought some benefits.


If Lord Rayner could be persuaded to do such a job for the immigration department of the Home Office, I would welcome it. In any event, somebody should.
Secondly, we should abolish the probationary period for people who are already here, who have come here with visas after they have been vetted, scrutinised, cross-examined, interviewed in the subcontinent or elsewhere. The idea of double jeopardy— the interview before one comes and another complicated process after one has got here—is preposterous.
Thirdly, we need the removal of subjective tests, which are wrong in principle and time-wasting in practice. By that I mean the reading of visitors' minds, trying to determine their intention, and also the primary purpose rule, with the onus on the spouse to prove that he or she comes here for no other purpose than marriage.
Fourthly, the six-month period should be the normal practice save where there are exceptional reasons why it should not he. Instead of that, we will get additional complications. We will get them from the Immigration Bill now going through the House of Commons. All the Bill will do to the regulations is make them more difficult to apply and increase the length of the queues.
But I do not believe for a moment that the Minister of State will accept our advice. Not only is he not empowered to do so, but our advice would bring into the system something that the Government would not accept—an honest, objective and fair test of the real and honest immigrant; whereas the Government's regulations are meant to deter and inhibit even the honest and legitimate immigrant. That is why the Home Office is in the chaos that it is tonight, and that is why it will remain in that chaos until the Government take an honest and honourable view about these matters.

The Minister of State, Home Office (Mr. Tim Renton): I have listened with astonishment, almost with disbelief, to what the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) has said. He lectures us about the delays at Lunar house, and he is right—they are excessive. One reason is the great number of applications that we received for registration for British citizenship before the end of last year.

Mr. Robin Corbett: The delays are too long.

Mr. Renton: I suggest that the hon. Member listens for a moment.
We received a great number of applications. This is a once-for-all problem. The matter is now over and the applications are in, but they have to be dealt with. I fully agree with the hon. Member that the delays are far too great, and I will come to that later. But when we come forward with constructive proposals in this statement to deal with the delay, suggesting that we should ease the entry time limits for businessmen, au pairs, fiancés and visitors and, in this manner, as I shall shortly explain, substantially reduce the caseload at Lunar house on mechanistic, routine work in order that the immigration and nationality department can spend its time on more complex matters—including the representations made by hon. Members — the right hon. Gentleman says that Opposition Members will vote against them on principle.
What a ludicrous contradiction there is in the right hon. Gentleman's mind.

Mr. David Winnick: rose—

Mr. Keith Vaz: rose—

Mr. Renton: No, I will not give way just at the moment; the debate is a short one and I hope that both hon. Members will have time to make their own contributions.
What a contradiction there is in the right hon. Gentleman's mind. We have come forward with these proposals. I find it impossible to believe that the Labour party will oppose them, because they would achieve precisely one of the objectives on which hon. Members are lecturing us.
Then the right hon. Gentleman complains about the proposals that we may have in mind for changes in the handling of hon. Members' representations in immigration cases. We are not debating those tonight, and it would be out of order to do so, but let me repeat something, because I want to make certain that the right hon. Gentleman is not confused about this. He talked about a full debate next month on the regulations. The debate next month will be on the Report and Third Reading of the Immigration Bill. My right hon. Friend the Home Secretary has written to the right hon. Member for Sparkbrook.

Mr. Hattersley: rose—

Mr. Renton: I should like to make this point, and 'then I shall give way.
We are still working on changes, along the lines that my right hon. Friend announced on Second Reading, in the handling of Members' representations on immigration cases. [Interruption.] It would be helpful if the right hon. Member for Sparkbrook would listen. I am trying to set him right, because he appeared to be in ignorance in his earlier remarks.
My right hon. Friend the Home Secretary outlined our ideas on this matter in a letter to the right hon. Member for Sparkbrook on 20 January. I should like to read one paragraph of it. I hope that the right hon. Gentleman will not object to this, but I know that he has distributed this letter widely to his colleagues. It says:
We have no intention of removing the rights of an MP to write to Tim Renton or myself about individual cases. The review which we have undertaken is intended, within the balance to which I have referred above, to produce proposals for dealing more efficiently with this vast amount of correspondence. Indeed, I hope that as a result we shall be able to offer an improved service to Members and their constituents.
On both points — these modest proposals and our thoughts about how to deal with changes in the handling of Members' representations—the right hon. Gentle:man is leading the Labour party into blind opposition. We are trying to do precisely what he requests to make the system better.

Mr. Hattersley: The Minister graciously informs us that the Home Secretary has no intention of preventing us from writing to him. That is not much of a concession. The idea that the Home Secretary might have any view on whether I should write to him is, at best, impertinent and, at worst, something more authoritarian. The question is not whether I or my right hon. and hon. Friends can write to the Home Secretary; it is whether he replies to us. The evidence of the past six months is that he has chosen not to write to us but to deal with our constituents without telling us how he is dealing with them. That is the question, and I should be grateful for an answer.

Mr. Renton: How gloriously pompous the right hon. Gentleman manages to sound. It brings back the worst moments when he was shadow Chancellor.
It is annoying to be lectured about delays in immigration procedures and in tackling immigration cases and at the same time be told, when we look for ways of making the procedures work more efficiently to help hon. Members, that the Labour party will oppose everything we suggest.

Mrs. Margaret Beckett: The Minister has been kind enough to say that my right hon. Friend's question was irrelevant, but he has not answered it. He has written to me on more than one occasion saying that he will reply to my constituents, but not to me, about representations that I have made. That is a matter of privilege for this House and has implications in every Department of the Executive, which has the power to decide whether to answer Members of Parliament. There is no point in anybody coming to a Member of Parliament because the answer can be given by a junior clerk, who would have dealt with the case even if the representations are made by a Member of Parliament. Will the Minister now answer my right hon. Friend's question and not make pompous and silly observations?

Mr. Renton: No, I shall not be led down that path, for the simple reason that, providing the business managers can agree, we shall have a debate on these proposals. We do not wish to ram our suggestions through the House; we shall have a debate about what the hon. Lady has said. This not a matter of privilege; that suggestion has already been raised.
What we wish—the hon. Lady must take my word for it—is to have a procedure that will enable officials and Ministers, whoever they are, to deal efficiently and effectively with the complex and difficult cases that concern hon. Members. I suggest to the hon. Lady—I know the correspondence to which she is referring—that she waits until she hears our proposals and we shall then debate them. If she still finds them wrong, she can tell us so.
Let me move on to these modest rules changes. What we are debating tonight implements the proposals which my right hon. Friend the Home Secretary announced on 16 November during Second Reading of the Immigration Bill, and which were laid before the House on 14 December. I hope that the confusion of the right hon. Member for Sparkbrook has been clarified. These rules are totally separate from the Immigration Bill and from any rule changes consequent upon the passage of the Bill.
I stress again to the House that the purpose of these is to prove the effectiveness of the immigration control and to provide a better service to the genuine applicant. We are introducing them now rather than waiting until after the passage of the Bill, because we believe that these improvements are urgent in view of the current pressures on immigration control.
Here I come back to the point made by the right hon. Member for Sparkbrook. My right hon. Friend the Home Secretary said on 16 November that the immigration and nationality department's backlog of work at the end of 1986 was some 47,000 cases. At the end of 1987, it was about 77,000 cases, the equivalent of seven months' work. I find no comfort in that, and that is why I am suggesting some changes. If the right hon. Member for Sparkbrook

were not so blind, and such a mixture of obduracy and apathy, he would support rather than vote against them tonight.
It is common ground that the present position is unsatisfactory, both for the applicants and for the staff seeking to deal with this volume of work. To give hon. Members who might not have as many immigration cases as others an idea of the scale involved, I point out that the immigration and nationality department received over 250,000 new cases last year, an increase of 10 per cent. over the position three years earlier.

Mr. Vaz: Will the hon. Gentleman give way?

Mr. Renton: No; the hon. Gentleman may have a chance to catch your eye during the debate, Madame Deputy Speaker.
The Department received about 750,000 pieces of correspondence last year. The public inquiry office alone dealt in 1987 with a record number of 192,000 personal callers, an increase of over a quarter in one year, and 162,000 telephone inquiries. The problem is not the result of any lack of commitment on the part of the staff in the Department. They have given excellent service in maintaining immigration control to Governments of all parties. At the root of this is the fact that some 2·5 million members of the ethnic minorities live in the United Kingdom, and there is continuing immigration of work permit holders, business men and others, and continuing family reunion. Understandably, this gives rise to an increase in the number of visitors to this country, which will continue.
Hon. Members have no doubt witnessed this increase themselves in their constituencies and surgeries. Within the Department, the speed at which applications can be resolved is itself influenced by increasing complexity in case law, as the right hon. Member for Leeds, East (Mr. Healey) will know, and a diversion of work caused by dealing with inquiries about unresolved cases. Against that background, we need to ensure that our procedures represent the most effective and efficient means of conducting fair but firm immigration controls. It is against that background that we are bringing in these changes.
What is at the heart of what we are proposing? One of the principles underlying the present immigration control is that a person is granted a period of leave on arrival and further periods of leave in this country. These together allow him to stay, if he so chooses, either until he completes the maximum period allowed or until he reaches the point at which he is eligible to apply for settlement. This has been a sensible principle and it is one which in some cases will need to be maintained. For example, students on long-term courses are usually admitted for the duration of their course. On the other hand, a student embarking on a series of short courses may not always be clear whether he will continue his studies in the United Kingdom, or for how long. The immigration and nationality department will need to be satisfied that he or she continues to attend classes, and to have sufficient money to pay his fees and support himself and any dependants.
The rule changes establish the new principle that, once a person has been given entry into a particular category, he should normally be given the maximum period allowed in that category up to the point at which he or she would have to leave the country or seek to remain on a


completely different basis. The right hon. Member for Sparkbrook gave the impression that the changes would be trifling and would have very little effect. I have to tell him that he is wrong. I certainly hope that he is wrong; I believe that he will be wrong. The proposal will remove the need for extensions of stay within the same category and will take about 40,000 cases annually from the total completed workload at Lunar house, which in 1987 was some 233,000 cases. That is a reduction of nearly 20 per cent.
There will he a number of benefits from this approach. Many people who now have to apply to the department for an extension of stay will not in future have to do so at all. Others will have to do so much less often. The resources of the department — hon. Members on both sides of the House should approve of this—will be able to be deployed to deal more quickly with non-routine applications, thereby improving both the effectiveness of immigration control and the service to the genuine customer and, I hope, to hon. Members. That is the principle behind the rules changes, and that is why I find it incomprehensible that the right hon. Member for Sparkbrook is not advising his hon. Friends to vote for them.
I shall now deal with the effect for particular categories. Au pairs are currently admitted to the United Kingdom for 12 months and they may apply at the end of that period for a further 12 months' stay, bringing them to the two-year maximum permitted. The rule changes will enable the immigration officer to admit an au pair on first arrival for the full two-year period of her stay here.
Business men and self-employed persons are currently admitted for an initial 12 months, with subsequent extensions of stay of 12 months at a time up to four years, at which point they are eligible to apply for settlement. We are keeping the requirement that business men and self-employed persons are first admitted for 12 months only. This will enable us to ascertain at the end of the initial year that the person has set up or entered into the business for which he was admitted. Provided we are satisfied of this, the person will normally then receive a single extension of three years to bring him to the four-year point.
We believe that these changes will be widely welcomed by foreign business men wishing to establish businesses and create jobs in this country. They will particularly benefit business men from the ethnic communities, as Indian business men, for example, represented some 10 per cent. of all business men receiving an extension of stay in 1986.
The present provisions for persons of independent means, sole representatives of overseas firms as defined in the new paragraph 32, writers and artists are the same as those for business men, except that, after an initial 12 months, a sole representative may be granted a three-year extension of stay. The rules changes will accord the same treatment to all four categories and will permit them to be admitted for up to the four-year maximum on arrival.
For visitors, we propose two changes, one in the rules themselves and one in procedure. The rules change is that the maximum length of a visit will be reduced from 12 months to six months. The procedural change—I repeat this to the right hon. Member for Sparkbrook—is that, with very few exceptions, all visitors will be admitted for six months on entry. This contrasts with the present

practice, whereby, although many visitors are admitted for six months, a sizeable minority are admitted for shorter periods but may apply for an extension.
I believe that this reduction to six months is entirely justified on its merits. Six months is an adequate — indeed, very generous—provision for a visit. It will meet the needs of the overwhelming majority of non-EEC visitors, who totalled about 5·4 million in 1986. In fact, less than 0·5 per cent. of all visitors apply for an extension beyond six months. It will nevertheless reduce the scope of abuse by that small minority who use the present period of 12 months to establish a more permanent basis of stay. Moreover, it will benefit the genuine visitor who will no longer have to come to the immigration and nationality department to seek an extension of stay, and remove a large number of applications for the department itself.
My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) was absolutely right to point out that the winners under these proposals far outnumber the losers.

Mr. Sydney Bidwell: rose—

Mr. Renton: If the hon. Gentleman will forgive me, I shall not give way. I wish to make haste and finish my remarks. Many other hon. Members wish to speak, and time for the debate is short.
The effect of the changes is that more visitors will potentially benefit from the procedural change of admitting them for six months than will lose from the reduction to six months. In fact, there will be about eight times as many winners as losers. Taking 1986 as the most recent example for which figures are available, about 280,000 visitors were admitted for less than six months, while less than 10 per cent. of that number — about 25,000 — were granted an extension of stay for more than six months. That shows the degree to which more will benefit than will lose. It does not apply just to visitors from countries such as the United States and Australia, although they will benefit too. Nearly 24,000 visitors from India were admitted to the United Kingdom in 1986 for less than six months, while only 5,000 were granted an extension of stay for longer than six months.
The United Kingdom is virtually alone in its generosity to visitors to stay for 12 months. Most west European countries—for example, France and West Germany — require all visitors to obtain a visa if they intend to stay more than three months. Some countries—for example, the Nordic countries—limit a visit to, say, three months in any six-month period. Some countries, such as Canada, limit a visit to a short initial period on entry, with the possibility of an extension of stay. Our proposal has none of that bureaucracy. For most visitors, it will do away with the need to seek an extension of stay. Six months will also be no less a period than that permitted to a British person wishing to visit many other countries—for example, a British visitor to India.
On Second Reading, some anxiety was expressed that a six-month maximum for a visit would not properly take account of compassionate reasons for a longer stay. As my right hon. Friend then said, it will always be possible on compassionate grounds to allow visitors to stay for longer than six months. The same situation arises now, when there are compassionate reasons for a visitor wishing to stay more than 12 months. Discretion will, however, continue to be exercised only very sparingly and in genuinely deserving cases.
Finally, I should also mention that affianced people of both sexes will be admitted for six months, instead of three months at present. This will reduce the need for a fiancé to apply for an extension of stay if, for example, through illness, a marriage has to be postponed.
The changes relate only to time limits and to the length of extensions of stay. They have nothing to do with primary purpose. They have nothing to do with third or fourth visit interviews for those seeking settlement in this country. The criteria for entry into such categories remain unaltered, as do those for extentions of stay. The changes that we are introducing for au pairs, business men, visitors and others will enable us to give them—

Mr. Andrew Faulds: Will the hon. Gentleman give way?

Mr. Renton: If the hon. Gentleman will forgive me, I shall not give way.

Mr. Faulds: It is a perfectly valid point.

Mr. Renton: I know the hon. Gentleman well. His points are always valid. I hope that he will be able to make them in his own speech.
The changes will enable us to give more generous periods of stay than at present. Therefore, transitional provisions are not needed. This is the last point that I have to make to the House.
We shall start to implement the changes with immediate effect from 1 February. There will, however, be certain visitors already in this country, or who will arrive before 1 February, who will be among that 0·5 per cent. annually who wish to stay longer than six months. For those people, paragraph 18 of the statement of changes will enable them to seek an extension of stay as a visitor for up to the 12 month maximum.
My hon. Friends and, I hope, Opposition Members will see that the rule changes represent a sensible and balanced new approach to immigration control. They will cut bureaucracy and red tape in just the way that the right hon. Member for Sparkbrook urged. They will improve service to the genuine customer, and they will enhance the effectiveness of immigration control. I commend them to the House.

Mr. Max Madden: This debate is taking place a few days after a meeting between the Minister of State and a group of black religious leaders. After that meeting they issued a statement, which said:
we have sought to impress on Mr. Renton our vigorous opposition to the present immigration policies of the British Government. The effect of these policies time and again, for the communities that we represent, is that families are divided, individuals are restricted or even prevented from visiting their relations here, people are deported and losing homes, jobs and even families, others are being detained for days, weeks and months as they seek to get into Britain. This must lead us to the conclusion that even current legislation and the way it is put into effect is racist. New legislation like the current Bill deepens the frustrations and anger already present in the black community — something which could have consequences undesirable to us all.
Those black leaders pressed four specific points on the Minister of State, urging him to take note of their representations and, when we reach Report stage of the

Immigration Bill, to withdraw grotesquely offensive clauses which will create considerable difficulties as far as black and Asian communities are concerned.
That delegation was made up of Canon Ivor Smith-Cameron of the General Synod of the Church of England—

Mr. John Carlisle: On a point of order, Madam Deputy Speaker. The hon. Gentleman is referring to a meeting which took place at the Home Office and which has nothing at all to do with the motion before the House—[Interruption.]

Madam Deputy Speaker (Miss Betty Boothroyd): Order. I have understood the hon. Gentleman's point of order. It is for me to decide what is relevant.

Mr. Madden: The delegation consisted also of Rev. Barry Thorley, vicar of St. Matthew's, Brixton; Pastor Io Smith, co-chair of the Conference for Christian Partnership; Mr. Ivan Weekes JP, secretary for community relations, Methodist division of Social Responsibility; Rev. Kennedy Bedford, executive secretary of the community and race relations unit of the British Council of Churches; Ms. Leela Ramdeen, chair of the Cardinal's Continuing Committee for the Caribbean Community—[Interruption.]—Sheikh Gamal Solaiman, head imam of the Islamic cultural centre, Regent's park mosque—[Interruption.]—and Dr. Gurdeep Singh Sethi, Sikh author and journalist.
One benefit of televising the proceedings of this House would be that black and Asian citizens of this country could see and hear the derision with which the names that I have just read to the House have been greeted by Conservative Members.
The Joint Council for the Welfare of Immigrants has produced, as always, an excellent briefing document, which states:
The main aim of the new rules is to reduce casework, and thus reduce the chronic and growing delays in dealing with applications, in the immigration division of the Home Office at Lunar House. In the briefing, we argue that the new rules will not, of themselves, produce the administrative benefits claimed for them and that their only certain result will be a restriction on visitors' rights which will particularly affect family visitors. We put forward alternative proposals … for improving administrative efficiency while protecting the interests of applicants.
The joint council has produced the booklet "Out of Sight" which is a useful commentary on the effects of the introduction of the new visa control system. I recall the Home Secretary, before the introduction of visa control, telling the public that those of us who were extremely sceptical about the effects of the new visa controls were scaremongers. I remember the notorious letter from the Home Secretary to Piers Merchant, the failed Conservative candidate for one of the Newcastle constituencies in the general election, that those of us who criticised the introduction of visas were troublemakers and professional pessimists. I object strongly to the fact that the Home Secretary — the architect of the present administrative shambles at Lunar house—has not even seen fit to attend the House tonight, still less to speak in the debate. I believe that the senior Minister, rather than the Minister of State, should take responsibility for that administrative shambles, which now pervades the Home Office, and be called to account to explain to the House what he is doing to resolve the crisis.
To my surprise, the one thing that we did not receive from the Minister of State, although we were often treated to it in the Standing Committee on the Immigration Bill, was the delivery of third-rate poems and fifth-rate limericks. Rather than the laid-back nonchalance and apathy with which the Minister has treated the serious criticisms made of the administrative shambles over which he now presides, the House would have benefited from some real information on what he intends to do about it.
If the Minister thinks that the new rules will reduce case work in the Home Office by the 25 per cent. that he has claimed, he is seriously mistaken. What will he do for the many people who come here genuinely and legitimately, particularly elderly people, who wish to stay with relatives and friends? Many of them will want to stay for far longer than six months, but tonight we are discussing the reduction of the legal limit from 12 to six months. Under Government pressure, the Immigration Bill has removed rights of appeal in such cases. Will the Minister seek to deport elderly people who wish to spend longer than six months with their relatives and will he stop us from being able to represent their cases in compassionate terms? If he thinks that he will then see a reduction in the number of representations and letters to the Home Office, he is again seriously mistaken.
What will the Minister do about other genuine and legitimate visitors who come to be with a sick relative, or a woman who is having a baby? They will often want more than six months here, and we shall doubtless be asked to make representations applying for extensions of leave. Will the Minister deport those people? Is he really going to say that Members of Parliament will be powerless to make representations on their behalf? He is entirely wrong if he thinks that the new rules will result in the benefits that he has mentioned.
Let us not be under any misapprehension. In the Home Office, there are now 150,000 unopened letters; it takes a month for the letters even to be sifted into categories. In B2, the work has reached a level of seven cases per officer. One poor officer has 69 case files on his desk. There is an 18-month backlog in case work inquiries. It is indeed a shambles. I agree with my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) that the only responsible action that the House can take is to press for an independent inquiry into the administrative chaos that now grips all sections of the Home Office.
I remember the previous Minister of State, previous Home Secretaries and the present Home Secretary, among others, telling us that the introduction of visas would resolve all the problems: they were being introduced only to reduce the queues and the inconvenience at Heathrow and other ports of entry. What has been the reality? I am told that, on Home Office figures, 17,000 people have been refused visits to this country; Foreign Office figures show that 34,000 have been refused visits. All are black or Asian. If the Minister is to reply, I ask him to apologise to me and to other critics of the visa control system. We have been proved right, and he has been proved wrong.
I want to refer to a very disturbing and worrying case. Sylvian Laurent, a 19-year-old Dominican girl, arrived at Gatwick airport recently at 10 am. She had come here for a two-month holiday in my constituency with her grandmother. She carried with her a visa, issued by the British authorities, valid for six months. She also had a letter from her grandmother inviting her for the two-month holiday. In addition, she had a letter from an

employer, who happens to be her uncle, who owns a firm based in Dominica, confirming that after the holiday she would return to Dominica to take up a job. She also carried a letter from the Labour Commissioner at the office of the Attorney-General and Minister of Legal Affairs, Immigration and Labour in Dominica stating:
Sylvian's grandmother was pleased with her performance at high school, and decided to reward her with a two months vacation commencing on 14 January. She is expected to take up employment … on 14 March.
I have known the applicant and her prospective employer for quite some time now and would be grateful for the issuance of the relevant visa to facilitate her travels, since, to my mind, she is a genuine visitor.
Immigration officers questioned that girl from 10 am until 5 pm. They refused the grandmother access to Sylvian throughout the day. She was tired, frightened and anxious, and it is not surprising that she refused all offers of refreshment. Finally, she was refused entry. She was allowed in to be removed within a few days. Had she not contacted my office and had I not stopped her removal and made representations to the Minister, she would be on her way back to Dominica within days of this debate.
How could immigration officers have suspected that she was coming here as a student, when she was travelling with her school certificates which she wanted to show her grandmother, because she was very proud of them, or that she was coming here to work, when she had a letter stating clearly — had the officers read the letters they would have known this—that she had a job to return to with a firm in Dominica? I cannot understand that. If my powers to intervene had been removed, that girl would have been sent back within a few days of this debate.
I delivered a letter to the Minister's office today asking for a full explanation why the immigration officers were not prepared to accept that Sylvian was a genuine visitor. I stated that Sylvian and her family were so distressed that she was asking that the six-month stay to which her visa entitles her should be granted and that she should have a personal apology from the Minister.
That young woman came here with a visa. I believe that she was treated most disgracefully. I am also aware, from the many cases that are referred to me, that many others who are entitled to come here are also refused visas. Those people are genuine and legitimate visitors. Unless the Minister gives a categoric assurance tonight that the overwhelming number of applicants will be given a six-month visa, black and Asian people will treat these rules with the same contempt as they treat all our laws, procedures and rules concerning immigration. They d o not believe the Minister or the Government.
Since 1971, claims about abuse have been the traditional excuse for introducing more and more restrictions on entry to this country. The rules will do nothing to resolve the administrative difficulties that they are supposed to put right. I hope that the Minister will ensure that the chaos is dealt with and that all legitimate and genuine visitors to this country, especially black and Asian visitors, will be treated properly, fairly and equally.

Mr. Nicholas Budgen: I cannot answer the hon. Member for Bradford, West (Mr. Madden) in the voice of passion and indignation that he adopted throughout his speech. However, I doubt whether he represents the true voice of the Asian and black people in this country.
There is a pleasant irony in this debate. These small measures are liberalising measures which are brought forward for two main reasons. The first is to try, as usual, to assuage the criticisms of the Labour party. The second is to try to reduce the administrative chaos.
I reflect, as one who has taken an interest in these affairs for some time, that if, for instance, Mr. Whitelaw, as he then was, had been introducing these measures a few years ago, there would have been the usual Tory pantomime. I and my hon. Friend the Member for Northampton, South (Mr. Morris) would have been going round the Tory party with an offensive early-day motion and we would have got about 100 signatures to a motion saying that we did not want these liberalising measures.
There would have been a much-publicised meeting of the Home Affairs Committee and Mr. Whitelaw would have come out sweating and swearing. Later in the week, on advice, the Daily Mail would have wondered whether the Prime Minister supported Mr. Whitelaw in his time of travail. We would then have voted against the liberalising measures.
But here we are about to go into the Lobby in support of liberalising measures which might have been brought forward by any Administration — perhaps not by a Labour Administration, because Labour Administrations are so often tougher on immigration than Tory Administrations—and we shall agree to them.
Yet my hon. Friend the Minister said that he was surprised that the Labour party intended to vote against these small but liberalising measures. I cannot say that I am surprised. The Labour party has always huffed and puffed about any proposals which have any effect of controlling immigration. In doing that they reflect the view that was so passionately, but I would suggest so mistakenly, put forward by the hon. Member for Bradford, West.
I would contend that the hon. Gentleman does not represent the voice of the Asians and the blacks in Britain at the present time. I have some small credentials for claiming to know their voice. The first parliamentary election in which I took part was in 1970, when I unsuccessfully opposed the right hon. Member for Birmingham, Small Heath (Mr. Howell). There were a number of immigrants in Small Heath in the late 1960s and 1970s. Immigration was certainly an important issue when I first contested Wolverhampton, South-West in 1974.
The right hon. Member for Birmingham, Spark brook (Mr. Hattersley) spoke in rather proud terms of having had to deal with 20, 30 or 40 cases a month. If we are swopping the number of immigration cases with which we have had to deal, my recollection is that when I was dealing with those cases in the days before the introduction of visas—I have checked my recollection with my right hon. Friend the Member for Aylesbury (Mr. Raison), who was the Minister who had to deal with them — I was dealing with 30 or 40 cases a week.
It may be that my views on immigration are not widely shared on the Labour Benches, but I did have, and do have, widespread contacts with a cross-section of the black and Asian community in the west midlands. All I can say is that I have not received many representations to the effect that the new visa system is unfair, racist or authoritarian.
Constituents come to me and ask me whether I can help them with individual problems, but as far as I can judge the visa system is in general supported by the immigrant community. I suggest to the Labour party, with all decent diffidence, that if it continues to adopt the tone that is adopted by the hon. Member for Bradford, West it will be to its electoral disadvantage.
It is certainly noted by the white community that the Labour party votes against all reasonable changes in the immigration rules, even if they are of a liberalising nature. The tone that the hon. Member for Bradford, West adopts is increasingly the tone that the right hon. Member for Sparkbrook adopts. I am not surprised that the Labour party adopts this tone, but it is not the tone that is adopted by the broad mass of the immigrant community. It is adopted by those gentlemen who are employed by the race relations industry and by those Asians and blacks who wish to become Labour party candidates, but it is not the voice of the broad mass of the immigrant community who are now happily settled in this country.
I enjoy the irony of this debate. I dare say that if those of us who wish to keep a strict control on immigration had observed these liberalising rules we might have objected to them. We shall not object to them, but I suggest that it is extraordinarily unwise of the Labour party to oppose these rules on the grounds that they do.

Mr. Alex Carlile: Although the Minister has been in his present job for but a few months, I know that he appreciates all too well that the immigration rules are not only a creature of the law, but a rather peculiar creature of the law. They are not a statute but they have the effect of a statute. They probably have a more direct effect on the everyday lives of people, and on their hopes and aspirations, than many Acts of Parliament, but they are not subject to the same law-making process of statutes, or to the same process of amendment.
I am sure that the Minister recognises that there has been a great deal of litigation, much of it entirely fruitless, because of the way in which these rules are created and amended. I am sure that he recognises, as a realist, that parts of these rules bring United Kingdom law into disrepute — and nothing more so than the primary purpose rule; although I am bound to concede that the production of a wholly objective test to replace the primary purpose rule would be extremely difficult. Nevertheless, surely something better than the primary purpose rule can be devised.
There are some welcome parts in these rule changes, but at first sight they seem to be largely another set of gratuitous and unnecessary restrictions. However, what we have heard so far tonight from the Labour party has been no more than the beating of breasts. Indeed, I feel bound to say that we have heard them beating their breasts so hard that I can hear the echo of the Labour party's conscience from its period in government.
I should like to put to the Minister a number of questions that are put in a genuine spirit of inquiry, so that we can hear his answers on issues that are the subject of this debate, and so that I can decide how to vote tonight and advise my right hon. and hon. Friends.
Will the Minister tell us exactly what is the reason for reducing the visitors' leave period? Will he confirm that


visitors whose maximum stay is reduced from 12 months to six will be able to apply while still here for variation of leave for special reasons?

Mr. Paul Boateng: Will the hon. and learned Gentleman give way?

Mr. Carlile: No, because I do not want to take too long.
Will the Minister confirm that the Government have no plans to change the rules so that in future visitors will be unable to apply for variation of leave for special reasons while they are still in the United Kingdom? Will the Minister also confirm that visitors will still have a right of appeal if they are refused variation of leave for special reasons? Will he also tell us whether he really believes that the immigration and nationality department will be saved a great deal of time by this change? Or is it not more likely that the Department will be faced by a huge number of applications for leave to remain, and possibly appeals thereafter?
I ask the Minister to confirm that the reduction to six months is an attempt to produce a standard, to standardise entry leave for visitors, and that generally six months will be the period that is permitted.

Mr. Vaz: Will the hon. and learned Gentleman give way?

Mr. Carlile: No, I shall not give way. I wish to proceed with my speech and thereby give other hon. Members the opportunity to participate in the debate.
Will the Minister confirm that there will not be discrimination against visitors because they come from Bangladesh or other parts of the Indian subcontinent? Will he confirm that visitors will not have their period of leave determined by reason of the country whence they come? [Interruption.] If the Minister can hear me above the braying from Labour Members sitting behind me who are not prepared to take their chance to catch your eye, Mr. Deputy Speaker, will he confirm that the reduced maximum stay for visitors will not result in a worsening position at entry clearance posts abroad? Will entry clearance officers at British posts abroad issue visas more readily to persons wishing to travel to the United Kingdom for personal and family reasons? I trust that he will understand that this is an especially important consideration in the Indian subcontinent.
The proposed changes place a limit of four years' stay on persons of independent means, writers and artists unless they apply for permanent settlement. Will the Minister explain why this change is taking place? These people are not a drain on public funds and they may do a great deal of good in enhancing the reputation of the United Kingdom abroad, without ever intending to settle here permanently. With the restrictions proposed to paragraphs 121 and 122 of the rules, many of those who are admitted as persons of independent means, writers and artists may lose the right to seek settlement if they have been abroad for lengthy periods during their four years in this country. Will the Minister confirm that those persons will not be handicapped because, for good reason, during the course of their work they have been abroad for lengthy periods during their four-year stay?
Finally, will the Minister explain why there is such a differentiation between business men and ministers of religion, missionaries, members of religious orders,

journalists and representatives of broadcasting organisations? Why are the Government choosing to discriminate in favour of business men as opposed to foreign correspondents, for example?
I ask the Minister to demonstrate that the Government are seeking to follow a logical strategy that makes the immigration rules, House of Commons 169, as amended, appear to be a coherent code for immigration officers to administer and for those who are seeking to understand the rules. I hope that we shall hear an answer from the Minister that will enable us to take the view that such a coherent policy is being applied. As I read the proposed changes, it appears that is not the position.

Mr. Jeremy Hanley: My comments will be shorter than I had intended them to be, because of the time constraint that has been placed upon the House, but I hope that they will reflect clearly the speech that I had prepared.
It was fascinating listening to the hon. Member for Bradford, West (Mr. Madden). During the consideration of the Immigration Bill in Committee he talked about the immigration rules, and throughout this evening's discussion of the rules he talked about the Bill. He read out long quotations from various sources. The hon. Gentleman makes Senator Biden seem like an original thinker.
The right hon. Member for Birmingham, Spa rkbrook (Mr. Hattersley) made a dishonest statement—perhaps I should say an inaccurate statement—when he said that when I intervened on 16 November during the consideration of the Immigration Bill I said that the primary purpose rule — he stressed "as currently instituted"—was introduced by the Labour Government on 22 March 1977. I said no such thing, and the record bears me out. It is a fact that the primary purpose rule was originated under the Labour Government on 22 March 1977. My hon. Friend the Minister confirmed that, and added that the rule dealt specifically with marriages of convenience. On the record is the honest case.
I agree with my hon. Friend the Minister that it is total hypocrisy and humbug to vote against the rule changes which will help those who are trying to visit this country and stay here some time longer. A total of 40,000 cases a year will be saved by the introduction of the rules. There are 7 million visitors to this country. I have been to Lunar house and seen the extent of the documentation there. It is not always possible to introduce new technology there, when the documentation must be kept in original form, when the documentation of personal interviews is, by its very nature, copious and detailed. I believe that the rule changes are wholly desirable. For my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) to admit that the changes are liberalising and that he will vote for them gives added confidence to all of us on the Government Benches.
We have been through the figures, which show that five times more visitors from India will benefit than will lose; from Pakistan, five times more; from Bangladesh, over twice as many.

Mr. Jeremy Corbyn: rose—

Mr. Hanley: I have no time to give way. I shall speak to the hon. Gentleman outside the Chamber later.
To say that the rules are racist is blatantly dishonest, because more than 10 times more visitors will now receive six months on entry than will be limited by the six-month maximum. Moreover, as my hon. Friend said about business men, the rules will apply irrespective of nationality. Business men from India, representing more than 10 per cent. of all business men, will receive an extension of stay; indeed, they received extensions in 1986. The business men from India who will benefit from the rule changes number more than the total from the United States, Australia and Hong Kong.
I wish now to comment on some of the quotations from the brief from the United Kingdom Immigrants Advisory Service, which was quoted at length—including the joke, which did not go down very well—by the hon. and learned Member for Montgomery (Mr. Carlile). I shall be selective in a different way. UKIAS said:
The reduction to 6 months is not of itself objectionable and visitors will still be able to apply for variation of their leave for special reasons, and they will have a right of appeal if refused.
That is from UKIAS's brief, which Opposition hon. Members—and I—approve of so much.
It is no wonder that the right hon. Member for Sparkbrook did not want to talk about the change with regard to au pairs, because UKIAS said, "This is welcome." It is also no wonder that Opposition hon. Members did not choose to quote the statement that the change proposed for writers and artists
is a change for the better.
In other words, UKIAS welcomes these changes. I am glad to say that.
If UKIAS is not good enough for Opposition hon. Members, may I quote the Joint Council for the Welfare of Immigrants?

Mr. Corbyn: rose—

Mr. Hanley: I have already told the hon. Gentleman that I shall not give way.
If Opposition hon. Members are not happy with UKIAS, they will certainly be happy with the JCWI, which tends to take a line that is against the Government's views on immigration. I wish to quote from the brief, which has been selectively quoted by Opposition hon. Members, the following passage:
JCWI welcomes the more realistic period to be granted to fiances and fiancees. We also welcome the move towards giving people the length of stay for which they are eligible and which they want: the present system creates unnecessary bureaucracy and is very unsettling to applicants, who cannot be certain how long they will be able to stay.
In other words, JCWI welcomes the changes in substance.
Since the JCWI and the UKIAS seem to approve of the changes, since the changes will benefit vastly more people than they will harm and since they will get rid of 40,000 cases a year from Lunar house, everybody—not just on the Government Benches—should welcome them. But there should be an urgent review of staffing levels and administrative systems throughout the immigration and nationality department. My hon. Friend the Minister knows that. He is also man enough to admit it. Therefore, I hope that during the year ahead we will see even further changes for the better.

Mr. Stuart Randall: Some of the changes to the immigration rules, especially those which refer to au pairs, fiancés, people of independent means, writers, artists, business people and the self-employed, are broadly to be welcomed, though they are long overdue. These changes and those for visitors are aimed essentially at reducing the number of times an overseas national must apply for his stay to be extended while he is in the United Kingdom.
In regard to the changes for visitors, which are perhaps the most important of the rule changes, there are serious doubts whether the Government's aims and intentions will be fulfilled, with the threat that visitors' rights will be diminished.
The Home Secretary, who is not here, announced on Second Reading of the Immigration Bill that under the new rules visitors, with small exceptions, will be granted stays of a maximum of six months. When he made that statement, had he read the draft instructions to immigration officers? The instructions, which are unpublished, determine in practice how the rules are to be operated. We are doubtful whether the Home Secretary's statement will be fulfilled in practice.
The Government's track record on the treatment of visitors is far from satisfactory. When the Home Secretary introduced the new visa requirements in 1986, he said:
The changes have been made … because of the pressure on Heathrow airport in particular.
He said later:
The changes will improve conditions for all passengers arriving at our ports and for all those in this country who come to greet them.—[Official Report, 27 October 1986; Vol. 103, c. 86–91.]
I have documents from members of the immigration service which show that nothing at Heathrow has changed since then.

Mr. Jacques Arnold: As the hon. Gentleman is referring to evidence on the working of the visa system, it may be useful to him and to the House if I give him a straight quotation from my borough's community relations officer—

Madam Deputy Speaker: Order. An intervention must be a direct question or a very brief comment.

Mr. Arnold: It is a very brief comment. I want to quote the experience of my borough's community relations officer, a Labour councillor, who went to see the operation of the visa system. He said that he was sceptical before his visit to India, but now he thinks that everything is being done fairly. That is what a Labour councillor has said.

Mr. Randall: That was an abuse by the hon. Gentleman, bearing in mind that so many hon. Members want to speak.
As I was saying before I was interrupted, there have been no changes at Heathrow. There were three-hour delays in 1985–86 before the visa system was introduced; in 1987 we have the same delays.
Detention figures indicate that between 14 October and 13 November last year 173 people spent the night in appalling conditions on the floor at Heathrow, with no blankets, no food and no drink. That was not the most busy time of the year. I understand that among those who had to stay in those conditions was a pregnant woman. I also understand that the premises do not comply with the


fire regulations. So the problems that the Home Secretary claimed the visa system would eliminate still exist at Heathrow. The Government have failed to tackle the root causes of the problems which are the grossly inadequate administrative systems and staff numbers at Lunar house.
Several right hon. and hon. Members referred to the chaos at Lunar house. Clearly, the magnitude of the problems makes the Government look administratively incompetent. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) and other hon. Members said, an independent inquiry is required to investigate and report on the scandal there.
I should like to ask the Minister five brief questions. First, will he increase staffing levels at Lunar house to cope with the growing demand, or will he rely only on efficiency improvements? Clearly, black and Asian family visitors suffer most from the 1986 visa system. It appears that this is because entry clearance officers abroad are changing the criteria for issuing visas. If these rules are approved, it is likely that the same pattern of refusals will occur in the future. Problems for visitors will increase substantially, especially for family visitors who wish to stay for periods beyond six months. Family visitors will tend not to be guaranteed a six-month stay initially. Family visitors tend to be refused entry because of suspicions about their finances or intentions.
We must all admit that there are difficulties in accurately assessing the precise effect of the new rules. What happens in practice is determined largely by the contents of the unpublished document "Instructions to Immigration Officers". Those secret instructions describe how the rules should be operated in practice. Accordingly, I ask the Minister, secondly, to tell us where in "Instructions to Immigration Officers" there is any reference to the discretion that an officer has outside the rules to decide what period of stay is stamped in a visitor's passport.
Thirdly, on what grounds under the new rules and new instructions will an immigration officer grant a stay of less than six months?
Fourthly, in practice does the Minister really expect significantly fewer people to be granted stays of less than six months?
Fifthly, will the Minister tell us what will happen to code 3 applicants, who are regarded by immigration officers as suspicious and are therefore allowed entry of less than six months? Is there a risk that they will not be admitted at all?
Tonight's debate has demonstrated that the Home Office function that deals with those foreign nationals who wish either to visit or to stay in Britain for a limited period is an administrative shambles. It is highly questionable whether the benefits that the Government claim will arise from the new rules will materialise. If so, the current incompetent administration at the Home Office could continue. Visitors will not benefit unless the vast majority are given visas which last for six months, without any increase in the visa refusal rate as a result of immigration officers refusing entry to those who previously would have been granted permission to stay for shorter periods. A certain consequence of the new rules is that visitors, especially family visitors, will find it much more difficult to extend a visit beyond six months, if needed. They will not be able to appeal against a decision that they should leave. That is why the Opposition will vote against the changes.

Mr. Renton: In the short time available, I should like to thank my hon. Friend the Member for Gravesham (Mr. Arnold) for his useful intervention and my hon. Friend the Member for Richmond and Barnes (Mr. Hanley) for pointing out so succinctly that, including those from the countries of the Indian subcontinent, five times more people will benefit from the rule changes than will suffer — a point singularly not taken on board by the hon. Member for Kingston upon Hull, West (Mr. Randall). I thank my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) for his helpful speech. It is nice to get such help, even at times from an unexpected quarter.
To both the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and the hon. and learned Member for Montgomery (Mr. Carlile) I give an assurance, repeating what I said earlier, that six months will be the norm for visits. I give them both that assurance. Exceptions will be limited to cases where there is a specific reason for granting less than six months, such as passengers in transit or people who come here for short-term medical treatment. I hope that, on that basis, the hon. and learned Member for Montgomery will be able to persuade his hon. Friends in the Liberal party — all those who are here—to vote with us tonight.
The hon. and learned Member for Montgomery asked me some other questions. On his question about variation of leave and its still being possible to apply for that within six months, yes, I can assure him that that will remain the same, especially for compassionate reasons. Rights of appeal will remain unchanged, and there will therefore be an appeal right for those who make in-time applications. I will reply to his other, detailed questions by letter.
I turn now to the hon. Member for Bradford, West (Mr. Madden). The House will have heard tonight, from the tone of high-pitched indignation with which the whole of his speech was delivered, what we have suffered in the Standing Committee on the Bill for 62 hours. For 62 hours we have had that noise delivered to us. I do not see what was his point in reading out that list of people from the British Council of Churches. I invited them to come to my office—

Madam Deputy Speaker: Order. I would like to see the Minister's handsome face, even if only in profile.

Mr. Renton: You bowl me over, Madam Deputy Speaker, with your kind words. Thank you very much.
I invited them to my office. We had an extremely useful and friendly discussion—far more friendly, I fear, than it would have been if the hon. Member for Bradford, West had been with us.
I can assure the hon. Member, as I said earlier, that on compassionate grounds people will be allowed to stay for more than six months, as they are now. But I have to say to the hon. Gentleman, who demanded an apology for misquotation of figures, that I have already given him in Committee the answer to the figures that he misquoted about the Foreign Office list. I have already told him that the figure that he quoted was not of total refusals but that it did not allow for applications that had been withdraw n or that were still pending receipt. I told him that in Committee, and I am amazed that he came back to that here tonight.

Mr. Stuart Holland: Will the Minister give way?

Mr. Renton: No, I will not, because I have only a minute or two more.
My hon. Friend the Member for Wolverhampton, South-West made one point with which I would particularly agree, when he referred to the huff and puff that we hear from Opposition Members on this issue. They lecture us when we aim to improve procedures. They lecture us when we try to bring more efficiency into the difficulties that certainly exist at Lunar house at the moment. They tell us that they will vote against these reasonable rule changes. They tell us nothing at all about what they would do. Why do they not tell us their policy, their proposals? The simple reason is that they are scared to bring their policy and their proposals on these issues into the open.
When the right hon. Member for Sparkbrook was shadow Home Secretary, he told us that he would cancel the British Nationality Act 1981. His successor, the right hon. Member for Manchester, Gorton (Mr. Kaufman), told us that he would cancel the Immigration Act 1971: all this—and only 1,000 more immigrants a year. We all know that that is impossible, that it is a total contradiction.
When my hon. Friend the Member for Richmond and Barnes said that Labour's policies on this issue were dominated by hypocrisy and humbug, I would add another ingredient—hysteria. Those are the characteristics that dominate the Opposition's immigration policies. If they have the gall to vote against these reasonable amendments to rules tonight, they will be confirmed in that hypocrisy, humbug and hysteria.
I warmly commend the rule changes to the House.

Question put:

The House divided:Ayes 202, Noes 257.

Division No. 157]
[12 midnight


AYES


Abbott, Ms Diane
Clarke, Tom (Monklands W)


Adams, Allen (Paisley N)
Clay, Bob


Allen, Graham
Clelland, David


Alton, David
Clwyd, Mrs Ann


Anderson, Donald
Cohen, Harry


Archer, Rt Hon Peter
Corbett, Robin


Armstrong, Ms Hilary
Corbyn, Jeremy


Ashley, Rt Hon Jack
Cousins, Jim


Banks, Tony (Newham NW)
Crowther, Stan


Barnes, Harry (Derbyshire NE)
Cryer, Bob


Barron, Kevin
Cummings, J.


Battle, John
Cunliffe, Lawrence


Beckett, Margaret
Cunningham, Dr John


Beith, A. J.
Darling, Alastair


Benn, Rt Hon Tony
Davies, Rt Hon Denzil (Llanelli)


Bennett, A. F. (D'nt'n &amp; R'dish)
Davies, Ron (Caerphilly)


Bermingham, Gerald
Davis, Terry (B'ham Hodge H'l)


Bidwell, Sydney
Dewar, Donald


Blair, Tony
Dobson, Frank


Blunkett, David
Doran, Frank


Boateng, Paul
Douglas, Dick


Bray, Dr Jeremy
Dunnachie, James


Brown, Gordon (D'mline E)
Dunwoody, Hon Mrs Gwyneth


Brown, Nicholas (Newcastle E)
Eadie, Alexander


Brown, Ron (Edinburgh Leith)
Eastham, Ken


Buchan, Norman
Evans, John (St Helens N)


Buckley, George
Fatchett, Derek


Caborn, Richard
Faulds, Andrew


Callaghan, Jim
Fearn, Ronald


Campbell, Menzies (Fife NE)
Field, Frank (Birkenhead)


Campbell, Ron (Blyth Valley)
Fields, Terry (L'pool B G'n)


Campbell-Savours, D. N.
Fisher, Mark


Canavan, Dennis
Flannery, Martin


Carlile, Alex (Mont'g)
Flynn, Paul


Clark, Dr David (S Shields)
Foster, Derek





Fraser, John
Moonie, Dr Lewis


Fyfe, Mrs Maria
Morgan, Rhodri


Galbraith, Samuel
Morley, Elliott


Galloway, George
Morris, Rt Hon A (W'shawe)


Garrett, John (Norwich South)
Morris, Rt Hon J (Aberavon)


George, Bruce
Mowlam, Marjorie


Gilbert, Rt Hon Dr John
Mullin, Chris


Godman, Dr Norman A.
Murphy, Paul


Golding, Mrs Llin
Nellist, Dave


Grant, Bernie (Tottenham)
O'Brien, William


Griffiths, Nigel (Edinburgh S)
O'Neill, Martin


Griffiths, Win (Bridgend)
Orme, Rt Hon Stanley


Grocott, Bruce
Patchett, Terry


Harman, Ms Harriet
Pendry, Tom


Hattersley, Rt Hon Roy
Pike, Peter


Healey, Rt Hon Denis
Powell, Ray (Ogmore)


Heffer, Eric S.
Prescott, John


Henderson, Douglas
Primarolo, Ms Dawn


Hinchliffe, David
Quin, Ms Joyce


Holland, Stuart
Radice, Giles


Home Robertson, John
Randall, Stuart


Hood, James
Rees, Rt Hon Merlyn


Howarth, George (Knowsley N)
Reid, John


Howell, Rt Hon D. (S'heath)
Richardson, Ms Jo


Hoyle, Doug
Roberts, Allan (Bootle)


Hughes, John (Coventry NE)
Robertson, George


Hughes, Robert (Aberdeen N)
Rogers, Allan


Hughes, Roy (Newport E)
Rooker, Jeff


Hughes, Sean (Knowsley S)
Ross, Ernie (Dundee W)


Hughes, Simon (Southwark)
Rowlands, Ted


Illsley, Eric
Salmond, Alex


Ingram, Adam
Sedgemore, Brian


Janner, Greville
Sheerman, Barry


John, Brynmor
Sheldon, Rt Hon Robert


Jones, Barry (Alyn &amp; Deeside)
Shore, Rt Hon Peter


Jones, Martyn (Clwyd S W)
Short, Clare


Kaufman, Rt Hon Gerald
Skinner, Dennis


Kirkwood, Archy
Smith, Andrew (Oxford E)


Lamond, James
Smith, C. (Isl'ton &amp; F'bury)


Leadbitter, Ted
Smith, Rt Hon J. (Monk'ds E)


Leighton, Ron
Snape, Peter


Livsey, Richard
Soley, Clive


Lloyd, Tony (Stretford)
Spearing, Nigel


Lofthouse, Geoffrey
Steinberg, Gerald


Loyden, Eddie
Stott, Roger


McAllion, John
Strang, Gavin


McAvoy, Tom
Taylor, Mrs Ann (Dewsbury)


McCartney, Ian
Taylor, Matthew (Truro)


Macdonald, Calum
Turner, Dennis


McFall, John
Vaz, Keith


McKay, Allen (Penistone)
Wall, Pat


McKelvey, William
Walley, Ms Joan


McLeish, Henry
Warden, Gareth (Gower)


McTaggart, Bob
Wareing, Robert N.


McWilliam, John
Welsh, Andrew (Angus E)


Madden, Max
Welsh, Michael (Doncaster N)


Mahon, Mrs Alice
Williams, Rt Hon A. J.


Marek, Dr John
Williams, Alan W. (Carm'then)


Marshall, Jim (Leicester S)
Wilson, Brian


Martin, Michael (Springburn)
Winnick, David


Martlew, Eric
Wise, Mrs Audrey


Maxton, John
Worthington, Anthony


Meacher, Michael
Wray, James


Meale, Alan
Young, David (Bolton SE)


Michael, Alun



Michie, Bill (Sheffield Heeley)
Tellers for the Ayes


Millan, Rt Hon Bruce
Mr. Frank Cook and


Mitchell, Austin (G't Grimsby)
Mr. Frank Haynes.


NOES


Aitken, Jonathan
Aspinwall, Jack


Alexander, Richard
Baker, Rt Hon K. (Mole Valley)


Alison, Rt Hon Michael
Baker, Nicholas (Dorset N)


Allason, Rupert
Baldry, Tony


Amess, David
Bellingham, Henry


Amos, Alan
Bendall, Vivian


Arbuthnot, James
Bennett, Nicholas (Pembroke)


Arnold, Jacques (Gravesham)
Benyon, W.


Arnold, Tom (Hazel Grove)
Bevan, David Gilroy


Ashby, David
Biffen, Rt Hon John






Blackburn, Dr John G.
Fairbairn, Nicholas


Blaker, Rt Hon Sir Peter
Fallon, Michael


Body, Sir Richard
Farr, Sir John


Bonsor, Sir Nicholas
Favell, Tony


Boscawen, Hon Robert
Field, Barry (Isle of Wight)


Boswell, Tim
Fookes, Miss Janet


Bottomley, Peter
Forman, Nigel


Bottomley, Mrs Virginia
Forsyth, Michael (Stirling)


Bowden, Gerald (Dulwich)
Forth, Eric


Bowis, John
Fox, Sir Marcus


Boyson, Rt Hon Dr Sir Rhodes
Franks, Cecil


Braine, Rt Hon Sir Bernard
Freeman, Roger


Brandon-Bravo, Martin
French, Douglas


Brazier, Julian
Garel-Jones, Tristan


Bright, Graham
Gill, Christopher


Brittan, Rt Hon Leon
Glyn, Dr Alan


Brooke, Rt Hon Peter
Goodhart, Sir Philip


Brown, Michael (Brigg &amp; Cl't's)
Goodlad, Alastair


Browne, John (Winchester)
Goodson-Wickes, Dr Charles


Bruce, Ian (Dorset South)
Gorman, Mrs Teresa


Buchanan-Smith, Rt Hon Alick
Gorst, John


Buck, Sir Antony
Gow, Ian


Budgen, Nicholas
Gower, Sir Raymond


Burns, Simon
Grant, Sir Anthony (CambsSW)


Burt, Alistair
Greenway, Harry (Ealing N)


Butcher, John
Greenway, John (Rydale)


Butler, Chris
Gregory, Conal


Butterfill, John
Griffiths, Peter (Portsmouth N)


Carlisle, John, (Luton N)
Ground, Patrick


Carlisle, Kenneth (Lincoln)
Hamilton, Hon A. (Epsom)


Carrington, Matthew
Hamilton, Neil (Tatton)


Carttiss, Michael
Hampson, Dr Keith


Cash, William
Hanley, Jeremy


Chalker, Rt Hon Mrs Lynda
Hannam, John


Chapman, Sydney
Hargreaves, A. (B'ham H'll Gr')


Chope, Christopher
Hargreaves, Ken (Hyndburn)


Churchill, Mr
Harris, David


Clark, Hon Alan (Plym'th S'n)
Haselhurst, Alan


Clark, Dr Michael (Rochford)
Hayes, Jerry


Clark, Sir W. (Croydon S)
Hayhoe, Rt Hon Sir Barney


Clarke, Rt Hon K. (Rushcliffe)
Hayward, Robert


Colvin, Michael
Heathcoat-Amory, David


Coombs, Anthony (Wyre F'rest)
Heddle, John


Coombs, Simon (Swindon)
Heseltine, Rt Hon Michael


Cope, John
Hicks, Mrs Maureen (Wolv' NE)


Cormack, Patrick
Higgins, Rt Hon Terence L.


Couchman, James
Hind, Kenneth


Cran, James
Hogg, Hon Douglas (Gr'th'm)


Currie, Mrs Edwina
Holt, Richard


Curry, David
Hordern, Sir Peter


Davies, Q. (Stamf'd &amp; Spald'g)
Howard, Michael


Davis, David (Boothferry)
Howarth, Alan (Strat'd-on-A)


Day, Stephen
Howarth, G. (Cannock &amp; B'wd)


Devlin, Tim
Howell, Rt Hon David (G'dford)


Douglas-Hamilton, Lord James
Hughes, Robert G. (Harrow W)


Dover, Den
Hunt, David (Wirral W)


Dunn, Bob
Hunt, John (Ravensbourne)


Durant, Tony
Hunter, Andrew


Dykes, Hugh
Hurd, Rt Hon Douglas


Eggar, Tim
Irvine, Michael


Emery, Sir Peter
Irving, Charles


Evennett, David
Jack, Michael





Janman, Timothy
Page, Richard


Jones, Gwilym (Cardiff N)
Paice, James


Jones, Robert B (Herts W)
Parkinson, Rt Hon Cecil


Jopling, Rt Hon Michael
Patnick, Irvine


Kellett-Bowman, Dame Elaine
Pattie, Rt Hon Sir Geoffrey


Key, Robert
Pawsey, James


King, Roger (B'ham N'thfield)
Peacock, Mrs Elizabeth


Kirkhope, Timothy
Porter, Barry (Wirral S)


Knapman, Roger
Porter, David (Waveney)


Knight, Greg (Derby North)
Portillo, Michael


Knowles, Michael
Powell, William (Corby)


Knox, David
Price, Sir David


Lamont, Rt Hon Norman
Raffan, Keith


Lang, Ian
Raison, Rt Hon Timothy


Latham, Michael
Redwood, John


Lawrence, Ivan
Renton, Tim


Lee, John (Pendle)
Rhys Williams, Sir Brandon


Lennox-Boyd, Hon Mark
Riddick, Graham


Lester, Jim (Broxtowe)
Ridley, Rt Hon Nicholas


Lightbown, David
Ridsdale, Sir Julian


Lilley, Peter
Roberts, Wyn (Conwy)


Lloyd, Peter (Fareham)
Roe, Mrs Marion


Luce, Rt Hon Richard
Rost, Peter


McCrindle, Robert
Rowe, Andrew


Macfarlane, Sir Neil
Sainsbury, Hon Tim


MacKay, Andrew (E Berkshire)
Sayeed, Jonathan


Maclean, David
Scott, Nicholas


McLoughlin, Patrick
Shaw, David (Dover)


McNair-Wilson, M. (Newbury)
Shaw, Sir Giles (Pudsey)


McNair-Wilson, P. (New Forest)
Shaw, Sir Michael (Scarb')


Major, Rt Hon John
Shephard, Mrs G. (Norfolk SW)


Malins, Humfrey
Shepherd, Colin (Hereford)


Mans, Keith
Shepherd, Richard (Aldridge)


Maples, John
Shersby, Michael


Marshall, John (Hendon S)
Sims, Roger


Martin, David (Portsmouth S)
Skeet, Sir Trevor


Mates, Michael
Smith, Tim (Beaconsfield)


Maude, Hon Francis
Soames, Hon Nicholas


Mawhinney, Dr Brian
Spicer, Sir Jim (Dorset W)


Mayhew, Rt Hon Sir Patrick
Spicer, Michael (S Worcs)


Miller, Hal
Squire, Robin


Mills, Iain
Stradling Thomas, Sir John


Mitchell, Andrew (Gedling)
Sumberg, David


Mitchell, David (Hants NW)
Tebbit, Rt Hon Norman


Moate, Roger
Thurnham, Peter


Monro, Sir Hector
Tredinnick, David


Montgomery, Sir Fergus
Trippier, David


Morrison, Hon Sir Charles
Waddington, Rt Hon David


Moss, Malcolm
Walker, Bill (T'side North)


Moynihan, Hon C.
Warren, Kenneth


Needham, Richard
Watts, John


Nelson, Anthony
Wheeler, John


Neubert, Michael
Widdecombe, Miss Ann


Newton, Rt Hon Tony
Wood, Timothy


Nicholls, Patrick



Nicholson, David (Taunton)
Tellers for the Noes:


Nicholson, Miss E. (Devon W)
Mr. Richard Ryder and


Onslow, Rt Hon Cranley
Mr. Stephen Dorrell.


Oppenheim, Phillip

Question accordingly negatived.

Income and Corporation Taxes Bill [Lords]

Considered in Committee.

[MISS BETTY BOOTHROYD in the Chair]

The Attorney-General (Sir Patrick Mayhew): Let me say briefly at the outset that the Committee is faced with an unusually large number of amendments to this Bill, despite the fact that it is purely and simply a consolidating measure. As my hon. and learned Friend the Solicitor-General made clear on Second Reading, this massive work of consolidation has taken four years to complete. Owing to the very tight timetable that had to be imposed upon the introduction of the Bill, the textual amendments and corrections could not be fully completed. Therefore, the amendments before the Committee correct purely typographical errors or comprise changes of a purely technical consolidating character. I thought it right to make that clear.

Mr. John Fraser: This is a somewhat indigestible diet for the time of night. I should tell my hon. Friends that the Attorney-General, with his characteristic courtesy, gave me advance notice that this problem had arisen because this is such a heavy Bill. We have to accept his word for it that everything that is before us is of a purely textual nature and that not a jot of the law is altered by the Bill. If he can give us that assurance, we shall all be anxious to make progress.

Mr. Jeremy Hanley: Can my right hon. and learned Friend give us an idea of the time scale for the completion of the Bill, including the final publication of the Act?

The Attorney-General: It is intended that the Act shall take effect on 6 April this year. Accordingly, if the House approves, further stages will be considered at a suitable time before that.
Clauses 1 to 8 ordered to stand part of the Bill.

Clause 9

COMPUTATION OF INCOME: APPLICATION OF INCOME TAX PRINCIPLES

Amendment made: No. 1, in page 6, line 39, leave out '70' and insert `69'.—[The Attorney-General.]

Clause 9, as amended, ordered to stand part of the Bill.

Clauses 10 to 18 ordered to stand part of the Bill.

Clause 19

SCHEDULE E

Amendments made: No. 2, in page 16, line 28, at end insert
`and subject also to section 170'.

No. 3, in page 16, line 36, at end insert
'and subject also to section 170'.

Clause 19, as amended, ordered to stand part of the Bill.

Clauses 20 to 35 ordered to stand part of the Bill.

Clause 36

SCHEDULE D CHARGE ON SALE OF LAND WITH RIGHT TO RECONVEYANCE

Amendment made: No. 4, in page 33, line 21, after 'immediately', insert 'after'.

Clause 36, as amended, ordered to stand part of the Bill.

Clauses 37 to 42 ordered to stand part of the Bill.

Clause 43

NON-RESIDENTS

Amendment made: No. 5, in page 39, line 8, after '22(2)', insert 'and (3)'.

Clause 43, as amended, ordered to stand part of the Bill.

Clauses 44 to 135 ordered to stand part of the Bill.

Clause 136

PROVISIONS SUPPLEMENTARY TO SECTION 135

Amendment made: No. 6, in page 113, line 2, leave out 'this section" and insert 'section 135'.

Clause 136, as amended, ordered to stand part of the Bill.

Clauses 137 and 138 ordered to stand part of the Bill.

Clause 139

PROVISIONS SUPPLEMENTARY TO SECTION 138

Amendment made: No. 7, in page 120, line 18, leave out 'that office or employment' and insert
'the office or employment by virtue of which he acquired the shares'.

Clause 139, as amended, ordered to stand part of the Bill.

Clauses 140 to 173 ordered to stand part of the Bill.

Clause 174

EXCLUDED EMPLOYMENTS

Amendment made: No. 8, in page 152, line 34, leave out 'or' and insert 'and'.

Clause 174, as amended, ordered to stand part of the Bill.

Clauses 175 to 177 ordered to stand part of the Bill.

Clause 178

CANCELLATION OF REGISTRATION

Amendment made: No. 9, in page 155, line 17, leave out '176' and insert '174'.

Clause 178, as amended, ordered to stand part of the Bill.

Clauses 179 to 189 ordered to stand part of the Bill.

Clause 190

PAYMENTS TO MEMBERS OF PARLIAMENT, REPRESENTATIVES TO THE EUROPEAN ASSEMBLY AND OTHERS

The Attorney-General: I beg to move amendment No. 10, in page 168, leave out lines 28 to 31.
The amendment leaves out a saving for a time before the Single European Act came into force. In fact, the Act came into force in 1987, so the saving is not required.

Amendment agreed to.

Clause 190, as amended, ordered to stand part of the Bill.

Clauses 191 to 217 ordered to stand part of the Bill.

Clause 218

INTERPRETATION OF SECTIONS 213 TO 217

Amendments made: No. 11, in page 194, line 15, leave out 'trade' and insert 'trades'.

No. 12, in page 194, line 20, leave out first 'of and insert `in'

No. 13, in page 194, line 35, leave out 'and 218' and insert 'to 217'.—[The Attorney-General.]

Clause 218, as amended, ordered to stand part of the Bill.

Clauses 219 to 241 ordered to stand part of the Bill.

Clause 242

SET-OFF OF LOSSES ETC. AGAINST SURPLUS OF FRANKED INVESTMENT INCOME

Amendment made: No. 14, in page 215, line 45, leave out '393(8)' and insert '393(9). — [The Attorney-General.]

Clause 242, as amended, ordered to stand part of the Bill.

Clauses 243 to 280 ordered to stand part of the Bill.

Clause 281

TAX REPAYMENTS TO WIVES

Amendment made: No. 15, in page 250, line 29, leave out '(4)' and insert `(6)'.—[The Attorney-General.]

Clause 281, as amended, ordered to stand part of the Bill.

Clauses 282 to 348 ordered to stand part of the Bill.

Clause 349

PAYMENTS NOT OUT OF PROFITS OR GAINS BROUGHT INTO CHARGE TO INCOME TAX, AND ANNUAL INTEREST

The Attorney-General: I beg to move amendment No. 16, in page 323, leave out lines 30 to 31 and insert—
'(d) to any payment to which section 369 or 479(1) applies; and subsection ( I) above does not apply to any small maintenance payment within the meaning of section 351.'.
This amendment is to take smaller maintenance payments out of clause 348(1) rather than, as the Bill is presently drafted, out of clause 349(2).

Amendment agreed to.

Clause 349, as amended, ordered to stand part of the Bill.

Clauses 350 to 408 ordered to stand part of the Bill.

Clause 409

COMPANIES JOINING OR LEAVING GROUP OR CONSORTIUM

Amendment made: No. 17, in page 386, line 20, after `to', insert 'in'.—[The Attorney-General.]

Clause 409, as amended, ordered to stand part of the Bill.

Clauses 410 to 412 ordered to stand part of the Bill.

Clause 413

INTERPRETATION OF CHAPTER IV

The Attorney-General: I beg to move amendment No. 18, in page 391, line 39, after 'company' insert
'or, in the case of a company within section 402(3)(b), of its holding company'.

The Second Deputy Chairman: With this, we shall take Government amendments Nos. 19 and 20.

The Attorney-General: These are to achieve a more faithful consolidation of provisions in the previous Act. This point has been raised by a solicitor in the private sector, for which all concerned are most grateful.

Amendment agreed to.

Amendments made: No. 19, in page 391. line 42, leave out second 'the' and insert 'that'.

No. 20, in page 391, line 43, leave out 'of the company'. —[The Attorney-General.]

Clause 413, as amended, ordered to stand part of the Bill.

Clauses 414 to 426 ordered to stand part of the Bill.

Clause 427

REDUCTION OF CHARGE UNDER SECTION 426 IN CERTAIN CASES

The Attorney-General: I beg to move amendment No. 21, in page 407, line 15, leave out 'this section' and insert `section 426'.
This is necessary to reflect the splitting of the previous legislation.

Amendment agreed to.

Clause 427, as amended, ordered to stand part of the Bill.

Clauses 428 to 502 ordered to stand part of the Bill.

Clause 503

LETTING OF FURNISHED HOLIDAY ACCOMMODATION TREATED AS A TRADE

Amendment made: No. 22, in page 485, line 34, after '833(4)(c)', insert
`and of Chapter I of Part III of the Finance Act 1971' —[The Attorney-General.]

Clause 503, as amended, ordered to stand part of the Bill.

Clauses 504 to 512 ordered to stand part of the Bill.

Clause 513

BRITISH AIRWAYS BOARD AND NATIONAL FREIGHT CORPORATION

The Attorney-General: I beg to move amendment No. 23, in page 494, line 1, leave out subsection (1).
The amendment seeks to leave out a provision that is no longer required, as the time during which a trigger event could occur has elapsed. In so far as any rights or liabilities have accrued and are still alive, they will be preserved by the provisions of schedule 30.

Amendment agreed to.

Clause 513, as amended, ordered to stand part of the Bill.

Clauses 514 to 600 ordered to stand part of the Bill.

Clause 601

CHARGE TO TAX: PAYMENTS TO EMPLOYERS

The Attorney-General: I beg to move amendment No. 24, in page 579, line 23, at end insert 'or'.

The Second Deputy Chairman: With this we may take Government amendment No. 25.

The Attorney-General: The first amendment corrects a typographical error. The second reinstates a reference to


the old law, rather than to that law as re-enacted in the consolidation, as the application referred to in clause 601(3)(e) would have been made before 18 March 1986. It is thought to be misleading to refer in that context to the consolidation.

Amendment agreed to.

Amendment made: No. 25, in page 579, line 28, leave out '590(5)' and insert '19(3) of the Finance Act 1970'.—[The Attorney-General.]

Clause 601, as amended, ordered to stand part of the Bill.

Clauses 602 to 614 ordered to stand part of the Bill.

Clause 615

EXEMPTION FROM TAX IN RESPECT OF CERTAIN PENSIONS

Amendment made: No. 26, in page 589, line 16, at end insert 'or '.—[The Attorney-General.]

Clause 615, as amended, ordered to stand part of the Bill.

Clauses 616 to 645 ordered to stand part of the Bill.

Clause 646

MEANING OF "NET RELEVANT EARNINGS"

Amendment made: No. 27, in page 616, line 23, after 'under', insert `section'.—[The Attorney-General.]

Clause 646, as amended, ordered to stand part of the Bill.

Clauses, 647 to 686 ordered to stand part of the Bill.

Clause 687

PAYMENTS UNDER DISCRETIONARY TRUSTS

Amendment made: No. 28, in page 649, line 11, leave out founded' and insert found'.—[The Attorney-General.]

Clause 687, as amended, ordered to stand part of the Bill.

Clauses 688 to 712 ordered to stand part of the Bill.

Clause 713

DEEMED SUMS AND RELIEFS

Amendment made: No. 29, in page 676, line I, after 'before', insert 'on'.—[The Attorney-General.]

Clause 713, as amended, ordered to stand part of the Bill.

Clauses 714 to 718 ordered to stand part of the Bill.

Clause 719

UNREALISED INTEREST IN DEFAULT

Amendment made: No. 30, in page 683, line 5, leave out '(5)' and insert '(4)'.—[The Attorney-General.]

Clause 719, as amended, ordered to stand part of the Bill.

Clauses 720 to 752 ordered to stand part of the Bill.

Clause 753

NOTICES AND APPEALS

Amendment made: No. 31, in page 719, line 6, leave out `13' and insert `12'.—[The Attorney-General.]

Clause 753, as amended, ordered to stand part of the Bill.

Clauses 754 to 845 ordered to stand part of the Bill.

Schedule 1 to 6 agreed to.

Schedule 7

TAXATION OF BENEFIT FROM LOANS OBTAINED BY REASON OF EMPLOYMENT

Amendments made: No. 32, in page 845, line 21, after 'sections', insert '354(5) and (6)'.

No. 33, in page 845, line 24, leave out '354' and insert '354(1) to (4)'.

No. 34, in page 845, line 27, after 'sections', insert '354(5) and (6)'.

No. 35, in page 845, line 35, leave out '354' and insert '354(1) to (4)'.—[The Attorney-General.]

Schedule 7, as amended, agreed to.

Schedules 8 to 17 agreed to.

Schedule 18

GROUP RELIEF: EQUITY HOLDERS AND PROFITS OR ASSETS AVAILABLE FOR DISTRIBUTION

Amendment made: No. 36, in page 914, line 2, leave out second 'or' and insert 'and'.—[The Attorney-General.]

Schedule 18, as amended, agreed to.

Schedules 19 to 26 agreed to.

Schedule 27

DISTRIBUTING FUNDS

Amendment made: No. 37, in page 973, line 17, leave out '760(3)(b)' and insert '760(3)(c)'. —[The Attorney-General.]

Schedule 27, as amended, agreed to.

Schedule 28 agreed to.

Schedule 29

CONSEQUENTIAL AMENDMENTS

The Attorney-General: I beg to move amendment No. 38, in page 985, line 33, column 2, leave out 'and (6)(a)' and insert ',(6) and (7)(a)'.

The Second Deputy Chairman: With this it will be convenient to take Government amendments Nos. 39 to 139.

The Attorney-General: As this is such a prodigious number of amendments, perhaps I should state that other Acts refer to specific enactments the references to which are rendered out of date by this consolidation. Schedule 29 amends those references to bring them into conformity with this consolidation. In other words, it achieves translations. It will be for the convenience of the Committee if we take the amendments together.

Amendment agreed to.

Amendments made: No. 39, in page 985, line 41, column 1, leave out '602(2)' and insert '602'.

No. 40, in line 48, column 2, leave out '602(2)' and insert '602'.

No. 41, in line 49, column 2, leave out '605(2)(a)' and insert '605(3)(a)'.

No. 42, in page 986, line 29, leave out '602(2)' and insert '602'.

No. 43, in line 31, leave out 'that subsection' and insert 'subsection (2) of that section.'.

No. 44, in line 42, after '267(3C)', insert 'or 278(5)'.

No. 45, leave out lines 44 and 45 and insert—


`(c) in subsection (4), in paragraph (a) for "85 of the Finance Act 1972" there shall be substituted "239 of the principal Act", and in aragraph (b) for "85" there shall be substituted "239"; and'.

No. 46, in page 988, leave out lines 9 and 10 and insert—

'15. In the Capital Gains Tax Act 1979—

(a) for "the Taxes Act", in each place where it occurs except sections 1, 31 and 34(4)(a), the definition of "the Taxes Act" in section 155(1) and paragraph 6(8) of Schedule 1 and any provision mentioned in paragraph (b) below, there shall be substituted "the Taxes Act 1988";
(b) in sections 16, 26, 29A, 32, 35, 75, 84, 87, 98, 107 and 136(10), paragraphs 4 and 5 of Schedule 5 and paragraphs 12 and 21 of Schedule 6 for "the Taxes Act" there shall be substituted "the Taxes Act 1970";

and in addition the 1979 Act shall have effect subject to the amendments specified in relation thereto in paragraphs 16 to 28 and 32 below.'.

No. 47, in page 999, line 8, after '333', insert `of the Taxes Act 1988'.

No. 48, in page 1000, line 5, leave out '619(7)' and insert `620(9)'.

No. 49, in line 10, leave out '(2)' and insert '(5)'.

No. 50, leave out lines 12 to 19.

No. 51, in line 22, leave out '579' and insert '519'.

No. 52, in line 27, at end insert—


'5(1)(c)
from "243(6)" to "1972"
8(5) of the Income and Corporation Taxes Act 1988


5(2)
from "the said" to "1972"
sections 8(5) and 822 of the 1988 Act (over-deductions from preference dividends before passing of annual Act)'.

No. 53, in page 1001, line 3, at end insert—
'12(3) 154 or 251(1) 113 or 337(1)'.

No. 54, in line 12, after '134', insert `(twice)'.

No. 55, in line 24, after '348', insert 'or 349(1)'.

No. 56, in line 26, at end insert—
'85(4) 111 54'.

No. 57, in page 1002, line 1, at end insert—


`2, para. 8(1) (c)
78(1) or 306(1) of the principal Act
32(1) of the principal Act or section 306(1) of the Income and Corporation Taxes Act 1970'.

No. 58, in line 7, at end insert—


61(1)(c)
463
706'.

No. 59, leave out line 20 and insert—


'30
47 or 48 (twice)
824 or 825 of the principal Act or section 47'.

No. 60, in line 24, leave out '349' and insert '350'.

No. 61, in page 1003, line 6, leave out '(6)' and insert `(5)'

No. 62, in line 7, leave out 'that subsection' and insert `section 615(3) of that Act'.

No. 63, in line 9, leave out '(6)' and insert '(5)'.

No. 64, in column 3, leave out lines 15 and 16 and insert 'section 102, 113(5), 263(5) and (6), 343(10) or 783(9) of the principal Act, or paragraph 22 of Schedule 7 to the Income and Corporation Taxes Act 1970, or '.

No. 65, in line 19, column 3, at beginning insert `sections 6 to 12 and '.

No. 66, in line 26, leave out '5(3) ' and insert '5(4)'.

No. 67, in page 1004, line 6, leave out '5(3) ' and insert '5(4) '.

No. 68, in line 12, columns 2 and 3, leave out

'286(4)
419(3)'

and insert—


`286(5)
419(4)'.

No. 69, leave out line 22.

No. 70 in page 1005, line 2, after '204', insert `(three times)'.

No. 71, leave out line 6 and insert—


'last para.
from "11" to "to the principal Act"
102, 113(5), 263(5) and principal Act" (6), 343(10) and 783(9) of the principal Act, to paragraph 22 of Schedule 7 to the Income and Corporation Taxes Act 1970'.

No. 72, in line 10, column 2, at beginning insert `Chapter'.

No. 73, in line 10, column 3, leave out 'III of Part XII' and insert 'section 468'.

No. 74, in line 11, column 3, at beginning insert `section'.

No. 75, in line 16, column 2, at beginning insert 'Chapter'.

No. 76, in line 16, column 3, leave out '111 of Part XII' and insert 'section 842'.

No. 77, leave out lines 24 and 25 and insert—

`540(2)
1979
1979 and any reference in this Act to the Taxes Act 1988 is a reference to the Income and Corporation Taxes Act 1988'.

No. 78, in page 1006, leave out line 22 and insert—


`44(6)
63 of the Finance (No. 2) Act 1987 404 of the Taxes Act'. Act 1987

No. 79, in line 23, leave out 'the Taxes Act 1988' and insert 'that Act'.

No. 80, in page 1007, line 10, after 'of', insert 'Part XIV of'.

No. 81, in line 12, at end insert—

`para. 13
533 of the Taxes Act
839 of that Act'.

No. 82, in line 17, at end insert—


'69(4)
80
34


134(2)
1970
1988'.

No. 83, in page 1009, line 6, column 1, leave out `(b)'.

No. 84, in line 6, column 2, leave out `(twice)' and insert `(three times)'.

No. 85, leave out line 11 and insert—


'para. 3(1) (d)
section 174
sections 388 and 389'.

No. 86, in line 16, leave out '349' and insert '350'.

No. 87, in line 20, leave out '349' and insert '349(1)'.

No. 88, in page 1010, line 20, leave out '238(1)' and insert '231(5)'.

No. 89, in line 22, leave out '701(8)' and insert '701(9)'.

No. 90, in line 23, leave out '59(10)' and insert '58(10)'.

No. 91, in page 1011, line 2, leave out '41(3)' and insert `41(2)'.

No. 92, in line 12, at end insert—

`1(2)
Taxes Act
Taxes Act 1970 and Part VIII of the Taxes Act 1988'.

No. 93 leave out line 17.

No. 94, leave out line 20.

No. 95, in page 1012, leave out lines 4 and 5 and insert

'74(2)
sub-paragraph (6) of the said paragraph 5
section 427(4) of the Taxes Act 1988


74(2)
sub-paragraph (2)(b) of that paragraph
section 426(2)(b) of that Act


74(5)
formed part of the said paragraph 5
were included in sections 426 to 428 of the Taxes Act 1988.'.

No. 96, in line 9 at end insert—


'89(1)
paragraph 1 of the said Schedule 8
section 251(2) of the Taxes Act 1988'.

No. 97 leave out line 15.

No. 98, in line 18, leave out '125(8)' and insert '124(8)'.

No. 99. leave out line 21.

No. 100, in page 1013, line 2, at end insert—


'155(2)
42(1)(2)
282(1) and (2)'.

No. 101, leave out lines 22 and 23.

No. 102, in line 26, column 2, at beginning insert 'subsections'.

No. 103, in page 1014, line 2, at end insert—


'64(9)(b)
154(2) or 155(1) of the Taxes Act
113(2) or 114(1) of the Taxes Act 1988'

No. 104, in line 3, leave out '66' and insert '65(5) , 66(5)'.

No. 105, in line 3, leave out 'Income and Corporation'.

No. 106, in line 5, at end insert—


'73(6)
533 of the Taxes Act
839 of the Taxes Act 1988'.

No. 107, in line 7, leave out '108(8)(b)' and insert `108(9)(b)'.

No. 108, in line 19, leave out '213(2)(a)' and insert '213(3)(a)'.

No. 109, in line 21, leave out '213(1)' and insert '213(2)'.

No. 110, leave out line 25 and insert—


'84(2)
(4) of section 481
(5) of section 745'.

No. 111, in page 1015, line 10, column 3, leave out '345(1) (a)' and insert '345(1)'.

No. 112, leave out lines 15 and 16.

No. 113, in line 20, at end insert '1988'.

No. 114, in line 22, at end insert '1988'.

No. 115, leave out lines 23 and 24.

No. 116, in page 1016, line 9, at end insert—


'12, para. 3(3)(b)
341 of the Taxes Act
488 of the Taxes Act 1988


3(3)(e)
Chapter III of Part XI of the Taxes Act
Part XI of the Taxes Act 1988


3(3)
533 of the Taxes Act
839 of the Taxes Act 1988'.

No. 117, leave out lines 15 to 19.

No. 118, in line 23, after 'the', insert 'Income and Corporation'.

No. 119, in line 24, column 3, after 'the', insert 'Income and Corporation'.

No. 120, in line 24, at end insert—


'8, para.11(2)
533 of the Taxes Act
839 of the Income and Corporation Taxes Act 1988'.

No. 121, in page 1017, line 17, at end insert—


'113(8)
532 of the Taxes Act
838 of the Taxes Act 1988'.

No. 122, in line 27, column 2, at beginning insert `(5) of section'.

No. 123, in line 27, column 3, at beginning insert `(6) of section'.

No.124, in page 1018, leave out line 4.

No. 125, in line 5, at end insert—


'12(2)(c)
II of Part I of the Finance (No.2) Act
IV of Part XIV of the Taxes Act 1988 1987


13(4)(b)
the Finance Act 1978
Schedule 9 to the Taxes Act 1988



21(3)
230 of the Taxes Act
657 of the Taxes Act 1988


72(4)
Finance Act 1978
Taxes Act 1988


86(3)
Finance Act 1978
Taxes Act 1988'.

No. 126, in line 9, at end insert—


'96
234(3) of the Taxes Act
210(4) of the Taxes Act 1988'.

No. 127, leave out lines 12 and 13 and insert—


'151(1)
218 of the Taxes Act
615(3) of the Taxes Act 1988'.

No. 128, line 19, column 2, at end insert 'of the Taxes Act'.

No. 129, in line 19, column 3, at end insert 'of the Taxes Act 1988'.

No. 130, leave out line 21 and insert—


'174(1)(a)
VII of Part II of the Finance Act 1984
V of Part VII of the Taxes Act 1988


174(1)(a)
92(3)
757(3)


174(1)(b)
1 of Schedule 9 to the Finance Act 1984
4 of Schedule 4 to that Act


174(1)(b)
2(2)
7(2)


178(1)
358 of the Taxes Act
468 of the Taxes Act 1988


204(5)
from "478" to "1981"
739 or 740 of the Taxes Act 1988


272
52 of the Finance Act 1974
519 of the Taxes Act 1988


272
the definition of the Taxes Act
"the Taxes Act 1970" means the Income and Corporation Taxes Act 1970;




"the Taxes Act 1988" means the Income and Corporation Taxes Act 1988;'.

No. 131, in line 26, at end insert—


'68(7)
Taxes Act
Income and Corporation Taxes Act 1970'.

No. 132, in page 1019, line 5, after '5(4)(a)', insert 6(d)'.

No. 133, in line 5, at end insert—


'19, para. 16(3)
from "Part I" to "1983"
Chapter III of Part VIII of the Taxes Act'.

No. 134, leave out lines 23 to 26.

No. 135, in page 1020, line 4, at end insert—


'In the Housing Associations Act 1985 c. 69


Section




62(2)
341
488


62(2)
1970
1988'.

No. 136, leave out lines 14 to 17.

No. 137, in line 21, at end insert—


'69(6)
535 of the Taxes Act
841 of the Taxes Act 1988'.

No. 138, in line 22, leave out '65(8)' and insert '78(9)'.

No. 139, in page 1021, line 8, at end insert—

'In the Insolvency Act 1986 c. 45


Sch. 6




para.1
204 of the Income and Corporation Taxes Act 1970
203 of the Income and Corporation Taxes Act 1988


para.2
69 of the Finance (No. 2) Act 1975
559 of the Income and Corporation Taxes Act 1988'. —[The Attorney-General.]

Schedule 29, as amended, agreed to.

Schedule 30

TRANSITIONAL PROVISIONS AND SAVINGS

Amendments made: No. 140, in page 1033, leave out lines 15 to 18.

No. 141, in line 38, leave out from 'which' to `immediately' in line 39 and insert
`paragraph 9 or 17(1) of that Schedule applied'. —[The Attorney-General.]

Schedule 30, as amended, agreed to.

Schedule 31

REPEALS

Amendments made: No. 142, in page 1036, leave out line 6.

No. 143, in page 1038, line 3 at end insert—

'1979 c.14.
Capital 1979
Gains Tax Act
Section 155(5).





In Schedule 7, paragraph 5; in paragraph 8, in Part I of the Table, the entries relating to sections 265, 352 and 526 of the 1970 Act, the Finance Act 1972, section 29 of the Finance Act 1970, section 67 of the Finance Act 1976 and section 45 of the Finance Act 1977, and paragraph 3 in Part II of the Table; and in paragraph 9 the entries relating to sections 186, 246, 265, 266, 305, 352, 359, 360, 474, 488, and 489 of the 1970 Act, the Finance Act 1972, the Finance Act 1973, sections 26 and 30 of the Finance Act 1974, section 42 of and Schedule 8 to the Finance (No. 2) Act 1975, section 67 of the Finance Act 1976 and the Finance Act 1978 (except section 64(5)).'.

No. 144, in page 1039, column 3, leave out lines 32 to 35 and insert
`Section 50(10)(a) and (c).'.

No. 145, in page 1039, line 53, column 3, leave out (d)' and insert '(e)'.

No. 146, in page 1040, line 9, column 3, leave out 'and 21 to 23' and insert `, 21 and 22'. —[The Attorney-General.]

Schedule 31, as amended, agreed to.

Bill reported, with amendments; considered, read the Third time and passed, with amendments.

PETITION

Gipsy Sites (Avon)

Mr. Jonathan Sayeed: Before I present my petition, I congratulate you, Madam Deputy Speaker, on your verbal dexterity and stamina.
This petition to the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled sheweth that
the undersigned do hereby object to the intention of Avon county to develop gipsy encampments at Marsh Junction, St. Philips Marsh.
It is signed by 3,000 individuals who live and work in the area. It says:
The three proposed sites are within an area designated for an urban development corporation and their establishment would be in direct conflict with the purposes of the urban development corporation, which are to remove urban blight and promote regeneration.
The sites will be adjacent to housing and surrounded by industrial and commercial concerns that distribute cars and trucks, produce equipment for the Ministry of Defence, manufacture and store hazardous chemicals and deal in high-value, theft-attractive items of a wide variety.
Already, existing commercial concerns have been warned that insurance premiums will be raised to such a level that the viability of a number of companies will he seriously in doubt and thousands of present and potential jobs are threatened in an area of high unemployment should Avon county council's proposals be endorsed.
Wherefore your Petitioners pray that your Honourable House will call upon the Secretary of State for the Environment to reject any proposals for gipsy sites in the St. Philips Marsh area.
This petition has my wholehearted support.
To lie upon the Table.

Barker and Dobson plc (Takeover)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]

Mr. Geoffrey Lofthouse: Barker and Dobson plc, a small confectionery manufacturer and supermarket chain, has made a hostile takeover bid for the Dee Corporation, the country's third largest food retailer.
Dee is the largest distribution company in the country, with sales last year of £4,836·6 million. In terms of reported sales, profits and net assets, Dee is at least 20 times larger than Barker and Dobson. Gateway, a wholly owned subsidiary of Dee, accounts for approximately 13 per cent. of the United Kingdom's packaged grocery sales and employs about 68,000 people.
In addition, Dee owns F. A. Wellworth, the second largest and fastest growing food retail business in Northern Ireland, and Linfood Cash and Carry, one of the two largest food cash-and-carry wholesalers in Britain.
The financing of the Barker and Dobson bid relies on two key elements. The first is massive borrowings of about £1·6 billion, which, on the basis of the latest published accounts of both companies, would leave the enlarged group with negative net tangible assets of more than £600 million if the bid were successful. Barker and Dobson, with net assets of £30 million, is borrowing £1·25 billion to acquire Dee, which has net assets of £670 million.
Secondly, Barker and Dobson has stated that it expects to meet its debt obligations by selling all the five subsidiaries of Dee, other than Gateway, but Gateway's superstores will also be sold.
In his offer document, the chairman of Barker and Dobson said:
our programme for action will … include the sale of Dee's".
That will leave only Gateway's supermarkets in a severely truncated company.
The financial structure of the bid has major implications for Dee's business and employees. The £1·6 billion of borrowings, which is to be provided by a syndicate of largely foreign banks, led by Citibank of New York, would be at a floating rate of interest: 35 per cent. must be repaid in 18 months, 35 per cent. in 30 months and the remainder in 36 months. The financing package appears to stretch Barker and Dobson beyond prudent limits. What happens if interest rates rise? What happens when the borrowing facilities run out in three years? What happens if the asset-stripping exercise does not go according to plan, or if the company has a bad year? Even if the financial implications in themselves were insufficient for a reference to the Monopolies and Mergers Commission, it is clear from the DTI press notice that great concern is felt about the consequences of this bid. If Barker and Dobson is successful, it could open the floodgates to even higher leveraged bids.
The asset stripping of the Dee group and the huge borrowing liability have implications for competition in the United Kingdom food industry and for Dee's customers, employees and suppliers. The growth of Gateway as a major food retailing force has been accepted by the Monopolies and Mergers Commission as creating "a countervailing force" against such established and fast-growing food retailers as J. Sainsbury, Tesco and Asda.

Argyll's acquisition of Safeway has meant that there are now five leading food retailers in the United Kingdom. Barker and Dobson's bid would reduce the number of leading retailers to four, as it has stated that it will sell off the Gateway superstores and change 100 of Gateway's smaller stores to service another market.
Barker and Dobson's financing structure demands a very early sale of Gateway's superstores at a very full price. The key issue is not the combination of Barker and Dobson's almost negligible retail sales with those of Gateway. It is the sale of Gateway's superstores space of 3·2 million sq ft, plus its associated development programme, to another competitor. J. Sainsbury, Tesco and Asda are in the best position to offer to pay the highest price needed by Barker and Dobson, as they stand to gain substantial incremental benefits from the extensive additional selling space, and it is believed that a piecemeal sale would achieve that price.
The elimination of an important competitor and the simultaneous and significant strengthening of one of the other four leading food retailers must work against competition. F. A. Wellworth supplies an estimated 20 per cent. of the Northern Ireland food market. To which company will this important share of that local market fall?
Linfood Cash and Carry has a turnover of some £900 million. In order to secure an acceptable price, Barker and Dobson would have to sell to one of Linfood's two principal competitors: Booker or Nurdin and Peacock. Following such a sale, the buyer would dominate the United Kingdom wholesale trade, and prices charged to the small independent traders might well rise.
In 1987, the Dee Corporation opened 42 new stores, creating a total of 7,168 new jobs, of which 1,753 were in Scotland and 803 in Yorkshire and the north-east. Since the Dee Corporation took over Fine Fare some 20 months ago, 2,075 jobs have been created, of which 1,700 were in Yorkshire and the north-east—a total of 11 per cent. of Dee's investments.
Between now and the end of 1990, Dee proposes to open a further nine stores in Scotland, creating a total of 2,200 jobs. The proposed break-up of Dee would put this development programme in jeopardy. Many of the head offices and its divisions would be closed or severely reduced in size. Gateway alone has about 1,700 employees at Bristol and Keynsham. The new 250,000 sq ft head office, which is due to be completed in 1988, might become superfluous.
The sale of the superstores would have an effect on Gateway's distribution arrangements and lead to warehouse closures and job losses. Rationalisation would lead to a number of store closures and additional job losses.

Mr. Robert G. Hughes: I recognise the hon. Gentleman's general concern and his specific concern about jobs. Barker and Dobson took over a Budgen facility on the edge of my constituency and over the past year the number of those employed there has increased by 13 per cent. The record is quite good. I am not necessarily disagreeing with the hon. Gentleman.

Mr. Lofthouse: The hon. Gentleman is talking about a tiny firm when comparison is made with the Dee Corporation. I take the view that there is only so much


food to be sold in all areas and only so much money to be spent. The number of jobs to be made available is governed by those factors.
The proposed sale of the superstores would entail a costly disentanglement process, which would be destructive to the remaining Gateway business. This could lead to the loss of a number of key employees. In the systems area, for example, Gateway has the largest IBM System 38 in Europe.
The sale of the superstores would reduce customer choice in the food retailing sector. The prices of goods sold in stores transferred to the Budgen formula could increase by over 5 per cent. That is the average differential between Gateway and Budgen prices. It should be said that the Budgen range is significantly different from the range that is available at Gateway. It is likely that prices in the residual Gateway chain will rise. With a severely truncated chain of stores, the new company will not be able to buy on such favourable terms. An additional upward pressure on prices will be the requirement to service significant levels of acquisition debt despite the forced sale of assets.
The proposed sale of the superstores is likely to increase the buying power of the four remaining major food retailers, with an inevitable effect on suppliers' margins. Dee has a policy of promoting branded goods, unlike other major food retailers, and this is important for manufacturers seeking shelf space in certain markets. The need to service the massive debt and meet the demanding repayment schedule would be likely to have twin effects. Prices would have to be increased, and every possible means to improve buying terms would be necessary. It is the trade creditors of Dee—they represent about £600 million at the date of the last published accounts— who will suffer most if the group gets into financial trouble. The banks are proposing to exercise strict security over the group's assets.
Dee has been investing heavily in the long term and during its last financial year it has expanded its sales area by more than Sainsbury and Tesco put together. It is a term of the banking agreement that Barker and Dobson has entered into that Dee's capital expenditure programme should be severely curtailed. It is worth mentioning that when Dee bought Fine Fare it was stated that it would take three years to integrate Fine Fare into Gateway. Only one and a half of the three years has expired and the job is well under way and on course.
The financing arrangements proposed by Barker and Dobson for the bid, replacing equity with debt, are akin to junk bond financing in the United States, which has contributed to the structural problems of that country's economy. The implications of this opportunistic bid, which is possible only because of the proposed asset stripping and massive borrowings on which it relies, deserve the closest possible scrutiny by the authorities.
There would be a spin-off in my constituency. I may say, incidentally, that I have no connection with, and no brief for, any of the companies. Barker and Dobson is a small firm attempting to take over a much larger firm and then dispose of many of its assets. That is the only way in which it will be able to finance its borrowing.
All the takeover bids in the nation cause me great concern. Only last year in Pontefract, Tesco—one of the big four, and probably in the running for some of the assets—took over the Hillard chain after a brutal battle. While that takeover was happening, a local property developer was negotiating for land and buildings on the

outskirts of the town for a large supermarket complex. Since he has obtained the land and planning permission we find that Tesco is the interested party. It is preparing, with the local authority, to obtain more land, and it has informed the local authority that it intends to close the major supermarket that it purchased only last year. I do not wish to throw any suspicions about, but people in Pontefract wonder whether it knew when the takeover was happening that another big supermarket would be going up and the one that serves the centre of the town would be closed and sold for trading in other goods.
That is the takeover bid scene. I ask the Minister to request his right hon. and noble Friend the Secretary of State to reconsider his decision not to refer the bid to the Monopolies and Mergers Commission. I believe that the case I have presented tonight warrants great consideration and thorough investigation of the bid.

The Parliamentary Under-Secretary of State for Corporate and Consumer Affairs (Mr. Francis Maude): It is useful to have a chance to air these issues in the House, even at this time of night. The fact that many of my hon. Friends are here to listen to what is said is evidence of that. I note in particular that my hon. Friends the Members for Harrow, West (Mr. Hughes), for Bury, South (Mr. Sumberg) and for Bury, North (Mr. Burt) are present.
The hon. Member for Pontefract and Castleford (Mr. Lofthouse) has aired matters in a temperate way. It is not helpful to overstate the case on these difficult and delicate matters, and I am grateful to him for the way in which he raised them.
My right hon. and noble Friend the Secretary of State decided last week, and announced his decision hen, not to refer the proposed takeover to the Monopolies and Mergers Commission. His decision was in accordance with the advice that he had received from his adviser on mergers, the Director General of Fair Trading. I am sorry that I cannot discuss in any detail the reasons for that decision. Representations are made to us by the Director General of Fair Trading in confidence and I must respect the confidentiality of the advice which he provides to my right hon. and noble Friend. I can say, however, that all the representations on this matter were considered carefully by the Director General, and by my right hon. and noble Friend in reaching his decision.
The hon. Gentleman talked about the concentration and the high level of merger activity among major food retailers. It is true that in 1984 it was reckoned that the 10 largest grocery retailers had about 54 per cent. of total grocery and provisions sales. Following some takeover activity—the takeovers of Safeway by Argyll, of Hillard by Tesco and of Fine Fare by Dee—that share seems likely to have increased now to over 66 per cent. of the market. In certain local and regional markets, the concentration ratios may be even higher.
Our present mergers law and policy are perfectly capable of dealing adequately with the trend towards concentration. The Fair Trading Act 1973 provides for a case-by-case scrutiny of mergers. Each merger or merger proposal which qualifies on the basis of the assets or market share test laid down in the Act is considered by the Office of Fair Trading, and the director general advises the Secretary of State on whether it should be referred. Each merger proposal must be considered on its own merits, in the light of all the circumstances at the time. Only if a


merger is referred to the Monopolies and Mergers Commission and the commission concludes that it would be against the public interest does my right hon. and noble Friend have powers to take action against that merger.
Despite the trend towards increased concentration in the food retailing sector, it would be wrong to assume that any merger in this sector is by definition anti-competitive and hence against the public interest; on the contrary. It is worth noting, in defence of this view, that when the Mergers and Monopolies Commission reported in 1983 on the merger between Linfood and Fitch Lovell it reached the conclusion that some mergers
which would strengthen the ability of middle ranking chains to survive and continue to compete, and which might even go some way towards redressing the balance between them and the largest chains, should not be prevented without good reason.

Mr. Lofthouse: Does the Minister agree that in the example I have given in Pontefract Tesco is now the major owner of supermarkets in the district? If the bid goes through, and Tesco purchases the supermarket from Barker and Dobson, another supermarket in my constituency will be owned by Tesco, which will have a large private monopoly. What competition is there?

Mr. Maude: I take the hon. Gentleman's point. He will recognise that we realise its importance from the way in which my right hon. and noble Friend's announcement was made.
The Office of Fair Trading recently found that competition in the retailing sector was still strong and that, in general, lower buying prices were being passed on, to the benefit of consumers. It is clear that the matters are being kept under constant review by the Director General of Fair Trading.
Each merger or merger proposal in this sector will continue to be looked at, with a view to assessing its probable effect on competition, by the Office of Fair Trading, with the possibility of a reference to the MMC if public interest issues are raised. My right hon. and noble Friend's announcement that the proposed takeover by Barker and Dobson was not to be referred emphasises the close scrutiny which would be given to any divestment of assets following a successful acquisition by the bidding company.
The announcement read as follows:
This proposed merger is pursuant to a plan which is said to include also the divestment of certain assets of the combined company. The divestments account for a substantial proportion of retail food distribution in the UK. Any such divestments would fall to be considered under the merger provisions of the Fair Trading Act in the usual way, in order to determine whether they should be allowed to proceed. Such consideration would need to take account of concern about the concentration of food retailing, both in the country at large and in particular parts of it. The weight given to such issues would be course depend upon who were the intending buyers".

Mr. Tony Blair: I am grateful to the Minister for giving way and to my hon. Friend for allowing me to intervene. We know that the Barker and Dobson bid can only be financed out of the disposal of assets after the bid. That is beyond dispute. May I put to the Minister two points? First, given that almost certainly the assets will be disposed of to one of the other main competitors, would we be more prescient if we investigated

the competition aspects of the body now rather than waited for the bid to go through and a disposal to occur? Secondly, a leverage bid means that the buyer can finance the sale only by disposing of the assets. Is it not time that we had a good look at those bids in principle and measured them against the public interest?

Mr. Maude: I shall come to the hon. Gentleman's second point about the principle of leverage bids. On his first point, he said that the proposed bid involved a necessary divestment after the merger, and asked whether we should look at it on that basis. The answer is not to look at it at this stage. We must look at this merger and the market share of the combined companies.
If the bid were successful and the combined company chose to divest some assets to another purchaser or several purchasers—it is clear that a number of different types of assets are contemplated—it would be for us to look at the implications of sales to particular purchasers to find out the effects of the mergers on competition. That would be the right time to do that. We cannot speculate on the implications of hypothetical buyers, but we can make it clear, as we have done, that we are aware of the concern and that the Director General of Fair Trading will look carefully at the implications of any divestments.

Mr. Colin Shepherd: Dee Corporation has utilised a substantial sum of public money, certainly in my constituency, in developing a major distribution warehouse which would be part of the sell-off proposals. Since this would be redundant and part of the original proposal, would it be the Government's policy to claw back that public money? I should like to know the answer.

Mr. Maude: I am not sure that I can provide it. I do not know for what purposes and under what conditions the money was given, so I do not think that I can provide an authoritive answer, or indeed any answer.

Mr. Blair: I should like to press the Minister on his statement that he cannot look into the bid now. What would happen if the bid were successful and the new company decided to dispose of the Gateway superstores to one of the main competitors, so that a reference to the Monopolies and Mergers Commission became activated? What would be the position in terms of certainty and for the employees and shareholders if, having bought the company knowing that it could finance the sale only through the disposal, there was then a reference to the MMC and the bid were blocked?

Mr. Maude: That would have to be considered at the time. We cannot speculate on it at this stage. I must proceed; there are only three minutes left and I want to deal with the important point of leveraging.
The White Paper which we published a couple of months ago made it clear that the result of the review of mergers policy was that competition should continue to be the principal, although not the exclusive, consideration that my right hon. Friend bore in mind in deciding whether to refer the proposed merger. There are other public interest matters to be taken into account, but we made it clear that we would look principally at competition.
It is sometimes suggested that a leverage bid and the shareholders' response to it are intrinsically contrary to the public interest. I do not accept that. There have been two recent cases where leveraging of the bid has been considered to have raised public interest issues which


deserved further investigation by the commission— the Elders IXL's proposed takeover of Allied Lyons and the offer by Gulf Resources for IC Gas. They were considered by the commission.
There were other cases where a reference was not considered appropriate because shareholders and the market were best placed to decide on the merits or otherwise of the proposals. Two cases which spring to mind are the Demerger Corporation's bid in 1986 for the Extel Corporation and Valuedale's bid later the same year for Simon Engineering. It is worth noting that in both cases the offers were unsuccessful in the market and were rejected by shareholders.
The fact is that highly leveraged bids can and do fail in the market, which shows that shareholders — for a number of the reasons raised by the hon. Member for Pontefract and Castleford—are quite often unprepared to support offers which seem to them too risky. That has been shown to be the case.
The financial arrangements and the pereceived ability of the bidding management team to carry the offers through, along with the size of the potential benefits which have to be set against the risks, are all matters for the

shareholders to consider, and this is a healthy check on highly leveraged proposals. There are also checks in the City code on takeovers and mergers.
These are matters which have to be considered in each individual case. There is nothing inherent in a highly leveraged bid which means that the public interest requires it to be considered by the Monopolies and Mergers Commission. Each case has to be considered on its own merits. We make it clear that competition is the principal consideration that we shall keep in mind, and that will continue to be the case. If this bid turned out to be successful and divestments were subsequently made, competition would be our principal consideration at that stage.
But my right hon. and noble Friend has decided not to refer this proposed merger, in full consideration of all the issues and in accordance with the advice given to him by the Director General of Fair Trading, and I have, I am afraid, to tell the hon. Gentleman that I cannot hold out the prospect of that decision being reconsidered.

Question put and agreed to.

Adjourned accordingly at six minutes past One o'clock.